HOLMES INSTITUTE
FACULTY OF
HIGHER EDUCATION
HI6028 Taxation Theory, Practice and Law Individual Assignment T1 2019
Assessment Details and Submission Guidelines
Trimester T1 2019
Unit Code HI6028
Unit Title Taxation Theory, Practice & Law
Assessment Type Individual Assignment
Assessment Title Questions of Taxation Law
Purpose of the
assessment (with ULO
Mapping)
The individual assignment will assess students on the following learning outcomes:
1. Demonstrate an understanding of the Australian income tax system, the
concepts of income and deductions, CGT, FBT, GST general anti-avoidance
provisions and income tax administration. (ULO 1)
2. Identify and critically analyse taxation issues. (ULO 2)
3. Interpret the relevant taxation legislations and case law. (ULO 3)
4. Apply taxation principles to real life problems. (ULO 4)
Weight 20% of the total assessments
Total Marks 20
Word limit Not more than 2,000 words (acceptable to be 10% above or below this word limit)
Due Date Week 10 at 11:59PM
Submission
Guidelines
This assignment along with a completed Assignment Cover Page is to be
submitted by the due date in soft-copy only (Safe assign – Blackboard).
The assignment is to be submitted in accordance with assessment policy stated in
the Subject Outline and Student Handbook.
It is the responsibility of the student submitting the work to ensure that the work
is in fact his/her own work. Ensure that when incorporating the works of others
into your submission that it is appropriately acknowledged.
The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2
cm margins on all four sides of your page with appropriate section headings and
page numbers.
Reference sources must be cited in the text of the report, and listed appropriately
at the end in a reference list using Harvard referencing style.
It is the responsibility of the student who is submitting the work, to ensure that
the work is in fact her/his own work. Incorporating another’s work or ideas into
one’s own work without appropriate acknowledgement is an academic offence.
Students should submit all assignments for plagiarism checking on Blackboard
before final submission in the subject. For further details, please refer to the
Subject Outline and Student Handbook.
Proper referencing in accordance with school regulations.
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HI6028 Taxation Theory, Practice and Law Individual Assignment T1 2019
Individual Assignment Specifications
Purpose:
This assignment aims at assessing students on the Learning Outcome from 1 to 4 as mentioned above.
Assessment task:
Question 1 (10 marks)
Your client Helen wants to fund her business as a fashion designer, therefore she has sold some of the assets
as follows:
1- An antique impressionism painting Helen’s father bought in February 1985 for $4,000. Helen sold the
painting on 1 December 2018 for $12,000. (2.5 marks)
2- Helen sold her historical sculpture on 1 January 2018 for $6,000. She has purchased the piece on
December 1993 for $5,500. (2.5 marks)
3- An antique jewellery piece purchased in October 1987 for $14,000. Helen sold the antique jewellery
piece on 20 March 2018 for $13,000. (2.5 marks)
4- Helen sold a picture for $5,000 on 1 July 2018. Her mother purchased the picture in March 1987 for
$470. (2.5 marks)
Advise the Capital Gain Tax consequences of the above transactions.
Question 2 (5 marks)
Barbara is an economist researcher and commentator. The Eco Books Ltd offers her $13,000 for writing a book
about economics principles. Barbara has never written a book about economics principles, but accepts the
offer and writes the economics book called ‘Principles of Economics’. She assigns the book’s copyright for
$13,400 to The Eco Books Ltd. The book is published and she is paid. She also sells the book’s manuscript to
the Eco Books Ltd’s library for $4,350 plus several interview manuscripts she has collected while writing the
economics book for which she receives $3,200.
Discuss each of the above payments to Barbara separately and states if these are income from Barbara’s
personal exertion. (2.5 marks) Would your answer differ if Barbara wrote the Principles of Economics’ book
before signing a contract with The Eco Books Ltd in her spare time and only decided to sell it later? (2.5
marks) Support your answer by referring to relevant statutory and case law.
Question 3 (5 marks)
Patrick paid $52,000 to his son David to provide some Helpance in his newly started business. They agreed
that David repay his father $58,000 at the end of five years. Patrick provided this loan to David without any
formal agreement or security deposit for the sum lent. Patrick told his son that he need not pay interest.
However, David repaid the full amount after two years through a cheque, which was included an additional
amount equal to 5% on the amount borrowed.
By referring to relevant statutory and case law, you need to discuss the effect of these arrangement on the
assessable income of Patrick. (5 marks)
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HI6028 Taxation Theory, Practice and Law Individual Assignment T1 2019
Assignment structure should be as the following (students responses involves calculations, and
students must refer to the relevant legislation and cases whenever required according to the
questions).
Questions 1:
Capital Gain Tax regarding antique impressionism painting
Capital Gain Tax regarding historical sculpture
Capital Gain Tax regarding antique jewellery piece
Capital Gain Tax regarding picture
Questions 2:
Discuss Barbara ‘s income under the case scenario
Discuss Barbara ‘s income under the alternative scenario
Questions 3:
Discuss the effect of these arrangement on the assessable income of Patrick
Marking criteria
Marking criteria Weighting
Question 1
Capital Gain Tax regarding antique impressionism painting 2.5%
Capital Gain Tax regarding historical sculpture 2.5%
Capital Gain Tax regarding antique jewellery piece 2.5%
Capital Gain Tax regarding picture 2.5%
Question 2
Discuss Barbara ‘s income under the case scenario 2.5%
Discuss Barbara ‘s income under the alternative scenario 2.5%
Question 3
Discuss the effect of these arrangement on the assessable income of Patrick 5%
TOTAL WEIGHT: 20%
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HI6028 Taxation Theory, Practice and Law Individual Assignment T1 2019
Marking Rubric
Excellent Very Good Good Satisfactory Unsatisfactory
Question 1
Capital Gain Tax
regarding
antique
impressionism
painting
Advised the
Capital Gain Tax
consequences
regarding the
antique painting
correctly.
the scenarios
given in the
question.
Student has
identified the
most relevant
sections of the
law.
The answer to
the questions
is well
organised, but
demonstrates
illogical at
some points.
Referencing is
good but to
complete
reference is
given.
Some detailed
conclusions in
regards to the
Barbara ‘s
personal
exertion are
reached from
the evidence
offered.
There is no
discussion
regarding the
payments to
Barbara. No
reference has
been given.
Question 3
Discuss the effect
of these
arrangement on
the assessable
income of Patrick
The effect on the
assessable
income of
Patrick has been
answered and
referenced (cases
and statutory)
accurately.
—
Calculation of Capital Gain and its nature Serial No. 1 2 3 4 Asset Name Antique Impressionism Painting Historical Sculpture Antique Jewellery piece Picture Holding period (more than 1 year or not) Yes Yes Yes Yes Nature of Asset Long Term Capital Asset Long Term Capital Asset Long Term Capital Asset Long Term Capital Asset Sale Price (A) 12000 6000 13000 5000 Purchase Price (8) 4000 5500 14000 470 Gain/(Loss) (A-B) 8000 500 -1000 4530 Nature of Gain/(Loss) Long Term Capital Gain Long Term Capital Gain Long Term Capital Loss Long Term Capital Gain
Calculation of Tax on Net Capital Gain Capital Gain on : Antique Impressionism Painting 8000 Historical Sculpture 500 Antique Jewellery piece -1000 Picture 4530 Net Long Term Capital Gain 12030 Rate of Tax (see Note) 15% Estimated Capital Gain tax (12030 x 15%) 1804.5
Note: As per topic no. 409 of Tax topics issued by IRS, Tax Rate on Most capital gains is no higher than 15% for most taxpayers but the tax rates vary according to the ordinary income tax brackets.
Advise: On selling of Antique impressionism painting, Historical Sculpture and Picture, there will be a long term capital gain whereas on selling of jewellary, there will be a long term capital loss which can be set off with the long term capital gain to calculate the net long term capital gain for taxability.
