HA3042 TAXATION LAW

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HA3042
TAXATION LAW
final assessmeNt

Trimester 1, 2021

Assessment Weight:       50 total marks

Instructions:

  • All questions must be answered by using the answer boxes provided in this paper.
  • Completed answers must be submitted to Blackboard by the published due date and time. 

    Submission instructions are at the end of this paper.

Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit

Question 1                                                                                                    (7 marks)

Sanjay is a new recruit in a consulting company and after few months he realised that in order to secure his promotion within the company, Sanjay must keep up the good standard and gaining the master degrees in business will boost his chance. So, Sanjay enrols as a part time student at Holmes College in Melbourne for MBA program. Sanjay subsequently incurs the following expenses:

$
Enrolment Fees499
Text Books200
Travelling expenses from Work to College300
Tuition Fees (assuming Sanjay didn’t utilise HELP)6000

Please advise how much deductions that Sanjay are entitled to claim. Please give short explanations and section of the laws when applicable

ANSWER:  ** Answer box will enlarge as you type

Question 2                                                                                                    (7 marks)

Karanjit runs a delivery/courier business and had to replace the motor in one of his delivery vans. The original petrol motor had seized and need to be replaced. Karanjit decided to replace the petrol motor with aa diesel motor since it is more fuel efficient. The cost of replacing the motor was $25,000. If Karanjit replace it with the petrol motor, it will only cost $18,000.

Please discuss the deductibility of the outgoing under S25-10

ANSWER: 

Question 3                                                                                                    (7 marks)

Manpreet Kaur a 45 years old employee (Resident Individual) that have annual salary of $98,000 during Tax Year 20-21, where she also received a fully franked dividend from resident public company for the amount of $6,300. Manpreet got some eligible deductions for the year to the amount of $5,800. Manpreet has private insurance cover during the year. Manpreet has paid tax during the year on Manpreet’s salary for the amount of $27,500 (PAYG). Manpreet also still have HELP loan balance ($15,000) that Manpreet still needs to pay.

Based on the above information, what will be Manpreet tax payable/refund for the year 20-21 tax year?

Please take account on Medicare Levy, Medicare Levy Surcharge, PAYG, and HELP’s repayment

ANSWER: 

Question 4                                                                                                    (11 marks)

Navneet and Rohit are partners in small accounting consultancy firm. Both partners contributed $80,000 as capital at the beginning of the partnership. Navneet also transferred the ownership of her office as an additional capital into the partnership. (where the market value of the office at that time was $150,000).

The partnership agreement stated that Navneet will receive 65% distribution of Net Partnership Income while Rohit will be received 35%. The partnership also going to pay 9% interest on introduced capital for each partner. Both Navneet and Rohit will receive $35,000 salaries.

During the year, due to COVID 19 the partnership short of working capital hence Rohit provided $50,000 loan toward the partnership where the partnership will give 15% interest on this loan.

For the year ended 30 June 2021, the partnership has an income of $350,000 and total expenditure of $185.000 (including salary and interest payments toward the partners)

Additional Information: Navneet and Rohit are resident single taxpayer with no private health insurance

Required:

  1. Calculate the Net Income of Partnership
  2. Calculate the Amount available for Distribution
  3. Calculate Rohit tax payable (Please consider Medicare and Medicare levy surcharge as well)

ANSWER: 

Question 5                                                                                                    (11 marks)

Maharaj Pty Ltd is an Indian restaurant that specialised in lamb and chicken biryani, Maharaj cater both dine in and take away, Maharaj located in Melbourne CBD where the company pay rents to the landlord that own the space. Maharaj employs 5 salaried staffs and registered for GST.

Maharaj also own 3-bedrooms apartments (residential) that the company rent out for the amount of $750/week ($39,000/year)

For the period ending 30 June 2021, the company recorded the following transactions

Amount Included GST where applicable
Income $
Sales of Lamb Biryani         252,000
Sales of Chicken Biryani         151,200
Sales of Drinks           88,000
Rental income (Residential Property)           39,000
Expenses
Purchase of Ingredients (Raw Chicken, Lambs)           35,000
Spices           10,000
Cutlery (plates, spoons, forks)             5,500
Electricity           19,800
Bookkeeping/Accounting             6,600
Rental expense (Restaurant)         110,000
Depreciation expense (Furniture, fit outs)           31,500
Interest expense             4,650
Wages (Staffs)         160,000
Rental Property expenses
Management Fee (Payable to real estate agency)             2,145

Assume that valid tax invoices are available for all of these transactions, determine how much Net amount of GST which is payable to ATO for this period by Maharaj Pty Ltd. You need to provide short explanation for each components and legislation where its applicable.

ANSWER: 

Question 6                                                                                                    (7 marks)

As Covid 19 created havoc in the world’s economy, it also restricts people’ movement that created a headache for most “Multi National Corporation” as some of their overseas employees stranded within Australia for much longer than their intended stay.

Please review below article and analyse what causing this particular issues and how MNC/accounting firms try to handle the situation

https://home.kpmg/xx/en/home/insights/2020/12/flash-alert-2020-487.html

In your answer, you should discuss about the 4 residency tests as well

ANSWER: 

END OF FINAL ASSESSMENT

   Submission Instructions:

  • Save submission with your STUDENT ID NUMBER and UNIT CODE e.g. EMV54897 HA3042
  • Submission must be in MICROSOFT WORD FORMAT ONLY
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  • Only one submission is accepted.  Please ensure your submission is the correct document.
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