Answer To: TAXATION 1 3000 words TASK This problem solving assessment task has two components, Part A and Part...
Sumit answered on Sep 04 2021
Issue:
The Issue is whether or not there is any Capital Gains Tax implications to Philip And Kim, the tax payers given and the amount that will be inclusive in the income pertaining to the taxes concerning the tax payers, on the sale of either of the property (Sydney 151 Temple Street or Sydney 153 Temple Street), given that:
(a). The Property situated at Sydney 151 Temple Street was acquired by Philip from his aunt. The property before being passed to Philip was used as a commercial property and Philip converted the same into his residential property. Philip after acquiring interest in the property has incurred expenditure through renovations in the property. This property was not his current place of dwelling.
(b). The Property situated at Sydney 153 Temple Street was acquired by Philip on 1st July, 2017. He spends some amount in renovating the property and this property was his residential dwelling currently.
Law:
As per Section 104-10 of The Income Tax Assessment Act, 1997, A Capital Gain Event Occurs if we dispose a Capital Gain Asset. Further, Disposal of a Capital Gain Assets are effective in occurring whenever there happens to be a change in the ownership. Suppose it’s from you to some other owner happening because there is some kind of act or some event or something by operation relating to the law. However, the change pertaining to the ownership does not take place when an individual stop being the legal owner pertaining to the asset. However, he/she should continue in being its beneficial owner. There can be a situation when one can be merely because of some change in the trustee. This sheds light on the time that leads to the event that takes place in accordance to the contract pertaining to the disposal. When there happens to be no contract, then the change pertaining to the ownership takes place. Accordingly, the Capital gain appears to be calculated in terms of the capital proceeds that happens to be more than that of the cost base relating to the assets.
As per Section 40-185 of The Income Tax Assessment Act, 1997, It is effective in computing relating to the cost, effective concerning the Depreciating asset. It was effective concerning the passing relating to the beneficiary. This is effective concerning the matters relating to the cost concerning the asset. This happens to be effective concerning the market value pertaining to the asset. There happens to exist matters starting to holding on to reduce by any means of capital gain.
As per Section 115-10 of The Income Tax Assessment Act, 1997, this happens to be discount capital gain, there capital gain must be accordingly made by: (a) happens to be an individual; or (b) there exists complying superannuation entity; or (c) pertaining to trust; or (d) concerning the discount pertaining to the capital gain ousting out of a CAPITAL GAIN TAX event. This happens to be in respect of asset CAPITAL GAIN TAX pertaining to the complying superannuation/FHSA asset.
As per Section 115-15 of The Income Tax Assessment Act, 1997, To be a discount capital gain: (a) happens to be a cost base relating to the calculation concerning without reference pertaining to the indexation at any time; or (b) concerning the capital gain happening to arise under CAPITAL GAIN TAX event K7—usage of the cost relating to the concerned depreciating asset.
As per Section 115-25 of The Income Tax Assessment Act, 1997, To be a discount capital gain, the capital gain must result from a CAPITAL GAIN TAX event happening to a CAPITAL GAIN TAX asset to be acquired in relation to the entity concerning the capital made in gaining in terms of least 12 months concerning the event pertaining to the CAPITAL GAIN TAX.
As per Section 116-20 of The Income Tax Assessment Act, 1997, The capital proceeds from a Capital Gain tax of (a) money that has been received, in relation to the event happening; and (b) also the market value relating to any other property that have received, or something that are entitled to receive, in relation to the event happening.
As per Section 118-110 of The Income Tax Assessment Act, 1997, A capital gain or capital loss you make from a CAPITAL GAIN TAX event that happens in relation to a CAPITAL GAIN TAX asset that happens to exist as the dwelling relating to the interest in ownership that happens to be disregarded accordingly (a). when you happen to exist as an individual (b). there exists you in your dwelling pertaining to your main residence that happens to be straight in relation to your ownership period and (c). this interest does not even pass at your own accord in you being a beneficiary in, as well as you do not acquire this being a trustee pertaining to the estate in relation to that of a deceased person.
As per Section 118-115 of The Income Tax Assessment Act, 1997, this is inclusive of home unit or a flat (i) an equitable or legal interest relating to a stratum unit thriving in it or (ii) a right or a license for occupying it or (iii) having a share in the company that happens to own an equitable or a legal interest concerning the land on which the home unit or the flat has been erected that gives the person the right for occupying it.
As per Section 118-120 of The Income Tax Assessment Act, 1997, This is a Subdivision that is effective for the land that happens to be adjacent in relation to the dwelling begetting to the CAPITAL GAIN TAX event. It might happen in relation to the land or maybe the interest of ownership in it. This might be applicable to the extent concerning your usage of the land for domestic or private purposes in accordance to the dwelling though if it were a dwelling. However, the maximum area concerning the land happens to be covered by any kind of exemption. It involves the inclusion of the area relating to the land which is the core foundation of the dwelling)...