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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. Page 2 of 5 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 assistance 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) Page 3 of 5 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% Page 4 of 5 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. Supported the answer by accurate referencing. Student demonstrates very good knowledge by giving the exempt capital gain figure regarding the antique painting accurately. Student demonstrates good knowledge of CGT regarding the antique painting, the response needs more elaborations. Student demonstrates sound knowledge of CGT regarding the antique painting. Missed to support the answer by proper referencing. Student failed to identify the Capital Gain Tax consequences regarding the antique painting. Capital Gain Tax regarding historical sculpture Advised the Capital Gain Tax consequences regarding the historical sculpture correctly. Correct CGT calculation method has been chosen. Correct CGT figures and clear final comments are present. Student demonstrates very good knowledge of Capital Gain Tax consequences regarding the historical sculpture. Correct CGT calculation method has been chosen. Minor error in calculation of the CGT figures are present. Final comments are clear. Student demonstrates good knowledge of Capital Gain Tax consequences regarding the historical sculpture. Correct CGT calculation method has been chosen. Minor error in calculation of the CGT figures are present. Final comments need more elaborations. Student demonstrates sound knowledge of Capital Gain Tax consequences regarding the historical sculpture. However, student missed to missed to selects the right CGT calculation method. As a result, the calculation of the CGT figures are incorrect. Final comments are not relevant. Student failed to identify Capital Gain Tax consequences regarding the historical sculpture. Capital Gain Tax regarding antique jewellery piece Capital gain or loss of the antique jewellery has been identified correctly. Clear final comments are present. Student demonstrates very good knowledge of CGT by referring to capital gain or loss of the antique. Clear final comments are present. Minor error is evidenced in the answers. Capital gain or loss of the antique jewellery has been identified correctly. But fails to present clear final comments. Student demonstrates sound knowledge of CGT by referring to capital gain or loss of the antique but not all parts of the questions. Failed to identify the capital gain or loss of the antique jewellery. Capital Gain Tax regarding picture An excellent response presented and identified the Responded the question very good. Identified the Capital Gain Student demonstrates good knowledge of Sound knowledge of CGT is presented Student failed to identify the Capital Gain Tax Page 5 of 5 HI6028 Taxation Theory, Practice and Law Individual Assignment T1 2019 Capital Gain Tax consequences regarding the picture correctly. Supported the answer by accurate referencing. Tax consequences regarding