Subject Code and Title Taxation Law
Assessment Assessment 3: Case Study
Length 2000 words
Learning Outcomes This case study must be presented as an individual effort. The case study requires individual research. The course manual and set texts are intended to be the starting point of the research. It is expected the student will survey the relevant literature, including decided cases, and select appropriate additional resources.
The case study is designed to incorporate uncertainty. The student is expected to develop a piece of work which is written advice for their client. It must therefore identify the facts and issues presented by each aspect of the case study, identify and apply the relevant legislation and/or case law, come to a conclusion and make a recommendation to the client.
Specific learning outcomes
b) Explain ethical and professional responsibilities of tax agents under the including obligations under the Tax Agent Services Act 2009 (TASA) and Tax Agent Services Regulations 2009 (TASR).
c) Interpret and apply selected sections of the Income Tax Assessment Act ITAA36 and ITAA 97.
d) Identify and analyse the tax treatment of various types of income and deductions.
e) Effectively apply taxation law in determining tax outcomes in various scenarios and structures.
This assessment assesses your research skills, your ability to synthesise an original piece of work to specific content requirements and your ability to produce a comprehensible piece of advice which addressing the client’s needs.
It also assesses your written communication skills. The ability to deliver to a brief is an essential skill in the workplace. Clients may well approach advisors seeking a combination of specific information needs and advice on the tax implications of a particular arrangement in the Australian tax jurisdiction. It is therefore important to be able to identify all the issues presented by an arrangement and to think about the potential consequences of different approaches to addressing the client’s needs.
Your case study needs to identify and discuss the tax implications of the various issues raised. In order to produce your case study, you will need to review relevant case law and legislation. The subject manual and set texts are starting points only, you will be expected to use these initial materials to identify potential useful resources. You will then need to review your selected resources to see if they value add to your analysis.
Your case study is not just a list of answers. Your reasons for your conclusions and recommendations must be based on your research into the relevant cases and legislation.
LAW6001 Case Study T2 2018 Question 1 (10 marks)
With reference to the UK Australia Double Tax Agreement explain:
a) the meaning of the term Permanent Establishment.
b) how the business profits of an enterprise incorporated in the UK are taxed in Australia.
c) whether contracts made through an independent agent would result in a Permanent Establishment
Question 2 (10 marks)
Andrew McSwington is a highly regarded MLB prospect born in Adelaide. During the Australian off season he first travelled to Mexico to play in the Fall League for 2 months and then went to America to play in the minor leagues for 15 months. He signs the contract stipulating he is to be paid $145 000 for the 15 months in Adelaide and joins the minor league team shortly after Australian taxation theory law homework help. The contract states he is to be paid monthly into a bank account in the Turks and Caicos Islands
Andrew decides to purchase a home in America to use it as a base during the home and away series and rent it out for the remainder of the income year when he returns to Australia Law.
Discuss with reference to relevant case law:
1. Whether Andrew a resident of Australia for tax purposes
2. The source of the $145 000 paid for his baseball skills
3. Whether he is liable for taxation in Australia on the $145000 for his baseball skills
4. Whether Andrew is liable for tax on the rental income received from America during the balance of the year
Question 3 (15 marks)
What is the “first strand” of the decision in FC of T v The Myer Emporium Ltd 87 ATC 4363? Did the courts apply the first strand in Westfield Ltd v FC of T 91 ATC 4234? Compare and contrast the decisions in FCT v Myer and FCT v Westfield and suggest an explanation for the difference in the Court’s decisions.
Comment on whether the decision support the distinctions made between income and capital in the Australian taxation system.
Question 4 (15 marks)
a) With reference to Softwood Pulp and Paper v FCT 1976 explain whether a deduction is available for interest paid on a loan during the preparatory stages of a business.
b) With reference to Ronpibon Tin NL v. Federal Commissioner of Taxation (1949) 78 CLR 47 explain the importance of the ‘incidental and relevant test” in determining whether interest paid on loans in deductible.
c) With reference to FC of T v. Brown 99 ATC 4600; (1999) 43 ATR 1 explain whether interest paid on loans can be deductible after business activities have stopped
d) Comment, with reference to the Tax Agent Code of Conduct, on the role the tax advisor has in ensuring their client’s compliance with all relevant taxation laws, particularly in terms of interest deductions after business activities has ceased.