LAWS20060 Taxation Law Of Australia Employee Wages

QUESTION 1

a) What topic does Taxation Ruling TR 2018/4 cover?

b) Which Division of the Income Tax Assessment Act 1997 details available tax offsets?

c) What is the top tax rate applicable to a resident taxpayer in the 2018/19 ta year?

d) Give one example of an asset that is exempt from capital gains tax, including its legislative reference?

e) What does the CGT event B1 s104-15 tax?

f) Explain the formula contained in s4-10(3) ITAA 1997?

g) Explain the significance of the High Court case, FC of T v Day 2008 ATC 20-064 in the topic of deductions?

h) Explain in your own words the difference between marginal rate of tax and average rate of tax?

i) Explain what a consumption tax is?

QUESTION 2

Briefly explain the extent, if any, to which each of the following payments made by an Australian resident taxpayer during the current tax year would be an allowable deduction:

(a) Brett incurred interest expense on a loan he took out to pay employee wages. The loan was secured against his personal home.

(b) Julie incurred $500 in mobile phone charges for the year. She determined that her work related calls represented 60% of her total calls.

(c) Sally paid $1,200 during the tax year to a babysitter to look after her children that she required in order to go work.

(d) One of Jerry’s long term employees stole $20,000 worth of goods from the business during the tax year.

(e) Expenditure incurred in contesting a local government election of $5,000 with $2,000 of that, spent on a big election party.