Law Assignment

Assessment 1
Due Date: 6 January 2014 at 8.30AM AEST
Method of Submission:Electronic - Moodle
Weighting: 30%
Length: See below- Word Limit in Part A
Course Objectives
On successful completion of this course you should have acquired: A basic understanding of the Australian Taxation System
A sound knowledge of the main concepts and principles of Australian taxation law.
A reasonable degree of competence in applying the taxation laws and in preparing income tax returns of moderate complexity for individual taxpayers, companies, partnerships and trusts.
An understanding of the principles of Fringe Benefits tax and Goods and Services tax.
An acquaintance with the compliance requirements under the Australian taxation system.
An understanding of the concept of tax avoidance including a familiarity with some specific anti-avoidance provisions in the Australian tax legislation.
Details
This assessment relates to the above listed Course objectives.
This assessment item may be submitted as an individual or as a group assignment and MUST be submitted electronically through the educational interface - Moodle.
If you are opting to submit an individual assignment, the work must be the result of your personal effort. If material in the assignment was found to be similar to material in another assignment this will be treated as a case of plagiarism.
If you are opting to complete this assignment as a group assignment, you may work in a group of up to but no more than three students. Only one assignment will be submitted by a group, with the names and student numbers of all group members shown on a front cover sheet. All members of the group will receive the same mark.
As it is up to students to choose if they wish to work in a group and if so who the other members of the group will be, there will be no opportunity for the case to be made later than one or some members of the group did not contribute as much as others. If you choose to work in a group then choose the members of your group carefully.
Place your ‘WORD COUNT’ at the end of PART A
The assignment is assessed on the basis of the content presented and not the teamwork skills that may or may not be demonstrated.
While the assignment is based on material covered, you may find it necessary to access additional information to address some of the issues raised in the Assignment.
FAILURE TO FOLLOW ANY OF THE ABOVE INSTRUCTIONS WILL RESULT IN A LOSS OF MARKS
PART A
RESIDENCY INFORMATION
John and Susan who were born in Australia and are Australian residents decided to leave Australia in June 2013 to live overseas in France. They retained an investment property in Australia. They sold their private residence and they resigned from their full time jobs in Australia. Upon their arrival in France, they purchased a private residence in Paris and commenced new jobs.
However, after being away from Australia for 15 months, they decided to return to and live I Australia. They decided to sell their private residence in Paris and to return to Australia.
Before returning to Australia, they had an extended European holiday. They travelled to and lived in Amsterdam for 6 months, Berlin for 3 months and London for 4 months before returning to Australia.
REQUIRED:
Discuss whether John and Susan are residents of Australia for tax purposes for the period they left Australia to their eventual return to Australia. (10 MARKS)
(WORD LIMIT – 600 WORDS)
STUDENTS MUST VALIDATE THEIR ANSWERS BY REFERENCE TO LEGISLATION, CASE LAW AND TAXATION OFFICE RULINGS.

PART B(20 MARKS)
Dominic Smith is an employee of the Banyule City Council and operates a business as registered tax agent. He is married to Mary Smith and they have no dependants. They have no private health insurance. John Smith earned the following income and incurred the following expenses for the year ended 30 June 2013.
EMPLOYMENT AND OTHER INFORMATION
$
Gross salary –Banyule City Council105,000Reportable Fringe Benefits (Motor Vehicle) - Banyule City Council 25,500Motor Vehicle Allowance – Banyule City Council 12,000Gift of expensive wine from ratepayer of Banyule City Council in appreciation for solving a planning permit issue500
Gift of a golf club from a tax client as a birthday present250
Net proceeds from business - Tax advice given to private clients$3,500Hobby earnings from garage sales at his home18,000Sale of household goods on the internet3,000Gross capital gains from selling a jewellery piece purchased on 22 September 1985 - cost of jewellery piece $2,5004,500Gross capital proceeds from sale of shares in Eastfarmers Ltd- shares purchased in December 1985 for $10,00025,000Net Dividend BHX Ltd – non-resident company ( $8,000 tax deductedwhich is the allowable foreign tax credit amount)15,000Winnings at Casino 10,000Dominic’s gross service pay in the Army Reserve ( PAYGW $1,000)5,000
Fully franked dividends- XLY Pty Ltd – resident company7,000 Unfranked Dividends- Excel Mining NL5,000Partially franked Dividends – 50% franked- Rio Ltd3,500
Maintenance payments made by Dominic relating to a previous marriage9,200
Medical expenses paid by Dominic8,000
Gift to Royal Children’s Hospital 1
Brief Case for work related purposes – receipt kept275Payment of interest charged by Taxation Office on unpaid tax in 2012350
Self - Education expenses as follows:
Fees – Diploma of Business at CQU University3,000Travel – 1000 kms travel using private Motor Vehicle (4200 CCs)750
Books500
Meals while at University1504,400
Superannuation paid to AMP Superannuation Ltd2,500Life insurance policy for $100,000950Personal accident and sickness policy 3,500
Membership of the Professional Cooks Union100
Membership of the Institute of Public Accountants500
Home Office expenses – Used as a place of convenienceElectricity & Gas ($1,300 for 2012/13) – 10% use based on floor area of office130Mortgage Payments on private residence15,000
Purchase of umbrella for work85
Parking meters cost while delivering package for work purposes-no receipts150
Capital loss on sale of Woolies Ltd shares 8,000
Motor Vehicle Expenses – see below
MOTOR VEHICLE INFORMATION
Dominic uses his car for work purposes for 6 months of the financial year. He maintained a log book for the whole of the financial year. His private kilometres were 10,000 and his total kilometres were 40,000 for the year. The Motor Vehicle (4200ccs) cost $85,900 on 1/03/2012. It has an effective life of 8 years. Expenses for the year ended 30 June 2013 are as follows:
$
Fuel 2,104Cost of repairs –accident8,500Insurance555Repairs327Parking fees22Registration and 3rd Party438Road Tolls54Car washes45New Motor –purchased 1 March 201310,500
Dominic wants to maximise his motor vehicle claim for the year ended 30 June 2013
Calculate the TAXABLE INCOME and TAX PAYABLE of Dominic for the year ended 30 June 2013.