Taxation Law Assignment
The assignment requires extensive knowledge of the current Australian Taxation Law System. All the questions need to be answered in the form of an IRAC format, that is the Issue, Rule, Application and conclusion format.
Contents covered and weight: Weeks 1-4 (inclusive). ] Taxation Law Assignment is worth 20% of the total assessment for the subject and will be marked out of 40 marks. The final score will be scaled down to reflect the 20% weight (i.e. your final score will be out of 20 marks).
Word limit: Overall 2,000 words, with 10% tolerance.
Submission: Assignment must be submitted electronically in one single Word or PDF file via Turnitin. No hard copy required. Professional presentation and logical/legal reasoning, with correct application of legislation and cases are part of the assessment.
Late submissions policy: Late submissions will be penalised in accordance with the Late Submissions Policy (https://www.latrobe.edu.au/policy/documents/late- submission-of-assessment-tasks-policy.pdf).
Special Consideration and Extensions: Extensions to the deadline will be granted only on exceptional and unforeseen circumstances in accordance with the Special Considerations Policy (https://www.latrobe.edu.au/policy/documents/special-consideration-policy.pdf) and procedures (http://www.latrobe.edu.au/policy/documents/special-consideration-procedures.pdf). No extensions will be granted outside the scope of the Special Considerations Policy.
Academic Integrity: All assignments will be electronically and manually checked for plagiarism and collusion. Assignments will also be checked for contract cheating (where a student submits an assignment which is not of their own authorship, e.g.: purchase of assignments through specialised websites). Suspected cases of academic misconduct will be reported to the Academic Integrity Adviser for the appropriate measures. Please refer to the Academic Integrity policy (http://www.latrobe.edu.au/students/learning/academic-integrity) for more details.
Referencing and assignment format: Ensure you acknowledge the source of any materials used in the assignment by including footnote references. Always use academic formal language, ensuring your paragraphs are written in a clear and logical way. Review your assignment before submitting it and check for any spelling, grammatical and typographical errors. Repeated errors of this kind will be penalised.
Assessment criteria: Assignments will be assessed against the SILOs for the assessment. In particular, assignments will be assessed based on objective demonstration of the following:
1. Engagement of critical thinking and interpretation skills to correctly identify the issues to be analysed in the case study.
2. Application of critical thinking, interpretation and analytical skills to develop a meaningful analysis of the issue(s) previously identified, with detailed and analytical application of tax concepts, tax principles, legislation and case law. Mere citation, transcription or repetition of theory, concepts, legislation and case law without proper application will not attract any marks.
3. Correct application of tax concepts and case law principles to calculate tax liability (if required). Calculations must be supported by applicable legislation and case law (where applicable).
4. Elaboration of a solution to the issues presented in the case study, referring to the elements analysed and concluding the case.
Refer to Subject Learning Guide for grade band rubrics.
Graduate capabilities: The following Graduate Capabilities are assessed in this assignment:
· Writing – Writing skills are assessed based on the quality of the arguments presented, marks are attributed where student presents a well organised essay written in academic English, with logically sequenced and coherent paragraphs and proper application of legislation and case law. A good essay must be clear, objective, and easily understandable, and must provide a conclusion that is logically derived from the arguments presented. Essays whose paragraphs are not logically organised, with tautological arguments and poor syntax will receive less marks depending on the quality of the work presented.
· Cultural Literacy – Cultural literacy is assessed based on the demonstrated capacity to correctly interpret question facts with reference to Business/Accounting concepts and general knowledge expected from final year master students.
· Quantitative Literacy – Assessed by interpretation of case-based situations and performance of calculations.
· Critical Thinking / Creative Problem-Solving / Inquiry / Research – Critical thinking/Creative Problem Solving skills are assessed based on the student’s demonstrated capacity to make reasonable, justifiable and original assumptions leading to a correct and coherent conclusion grounded on legal provisions and case law precedents. Inquiry / Research skills are assessed by correct identification and application legislation, rulings and case precedents in order to provide legal grounds for their solution.
Case Study: Jim Page
Jim Page, aged 58, is a chartered accountant who owns and runs “Page Accounting Services”, which operates through a trust and has multiple unrelated clients. Jim primarily works from his home office in Bundoora, however occasionally he works at the premises of his client ABC Pty Ltd.
He employs an administrative assistant on a part time basis to take phone calls and manage appointments, and he is also assisted by an intern – an Accounting student who is undertaking a work placement subject. The intern provides basic data entry services but does not prepare or finalise any returns, accounting work or advices which are all prepared and finalised by Jim. Neither the administrative assistant or accounting intern are associates of Jim.
In 2018/19 Page Accounting Services earned a total of $350,000 in client fees, 70% of which it received from its main client ABC Pty Ltd, to whom Jim has provided on-going general accounting services for many years including the preparation and lodgement of monthly business activity statements, management accounts and other accounting services required from time to time. ABC Pty Ltd regards Jim as almost being one of its staff as he is regarded as being its in-house accounting resource.
The remaining 30% of fees comes from several minor clients for whom Page Accounting Services is contracted to provide specific advices on particular engagements.
The growth in the business of Page Accounting Services has been fully due to word of mouth referrals and the firm has not ever advertised its services, participated in tender arrangements or maintained a website. At as 30 June 2019 Jim has invoiced fees of $350,000 but only received payment of $300,000.
The following running expenses were incurred by the firm in relation to its business during the current income year:
Depreciation on office equipment
Jim also paid PAYG quarterly installments totalling $82,784 in the current year.
In February 2019 Jim had a heart attack and was in hospital for three weeks. As he was covered by a private health insurance policy during the year, his medical expenses were covered by his insurer. He also received a $5,000 insurance premium due to his illness. This amount was paid on 2 March 2019.
After his heart attack Jim reassessed his life and decided to reduce his workload by 50%. On 1 April 2019 he moved permanently to his beach house in Frankston and decided to dedicate part of his free time to his favourite activity: photography. He purchased a professional camera and shared his photos on his Instagram profile. Within weeks his profile became highly popular and he observed an exponential growth in the number of his followers. On 1 June 2019 Jim entered into an informal agreement with a manufacturer of photography equipment whereby Jim would be provided with free equipment which he would test and review on his Instagram profile. By the 30 June 2019 Jim had received and tested photography equipment worth $2,500.
(a) Advise Jim Page on the income tax consequences of the above activities for the year ending 30 June 2019, applying legislation and case law to support your answer. (28 marks)
(b) Calculate Jim Page’s tax liability for the year ending 30 June 2019, applying legislation and case law to support your answer.(12 marks)
(Total 40 marks)