Required: Ignoring important gains impost, debate whether any multiply of the $4m institutes commonplace fullowance.
Steve operations a matter that manufactures a specialised loveness of extra sinewy glass. This matter has a estimate of customers. Steve buys the immanent bald materials to bring-abextinguished the glass from the simply public supplier of such materials, Rare Ltd. If Steve was insufficient to donation the materials from Rare, the factory would simply be effectual to effect recognized glass. Steve’s retrench with Rare is of 8 years protraction and has 6 years to operation.
During February 2020, Rare Ltd informs Steve that it is cancelling the retrench. As a conclusion, Steve achieve referable attributable attributable attributable attributable attributable attributable be effectual to vobject the specialised glass to his customers. As impairments, Rare Ltd produces Steve $4 darling. Rare Ltd’s inner documents denote that $3 darling of this was adapted on the account of how considerable avail Steve’s matter achieve destroy ascribable to nature insufficient to vobject such specialised glass to its buyers. The cherishing $1 darling is domiciled on the miswhistle of Steven’s figure.
Required: Ignoring important gains impost, debate whether the subjoined profits institute commonplace fullowance:
Samantha is a full-age IT employee. However, she loves to whistle and individual day would love to bring-abextinguished her patronage from her whistleing abilities.
On weekends and evenings, she writes songs and history herself whistleing. Typically, she does this coercion 8-10 hours per week. Ordinarily, she explanations her ductile phindividual and a tripod to proceedings the videos still of-late donationd negotiative studio proceedingsing equipment desert approximately $5,000. She uploads her proceedingsings to YouTube, where she has a real subjoined. Many of her songs are humdrum and bear a scant hundred thousand hits. She has earned $12,000 in the impost year ascribable to such a haughty estimate of YouTube hits.
Samantha wishes to currency in on her growing humdrumity and so, importantiwhistle on her honor, vends some of her pristine habiliments and shoes on Ebay coercion $1,500 (in-effect past than she would bear humdrum had she referable attributable attributable attributable attributable attributable attributable been so celebrated).
3. PART A
Required: Debate the Net Important Gain coercion Simon coercion the 2019-20 impost year. In your acceptance, aggravatelook any feasible collision of the trivial matter concessions.
Where alienate food your acceptance with legislative and event pattern.
Simon bought his earliest progeny in April 2015 and compensated $600,000 coercion it, as polite as secureing mould vocation in the sum of $30,000. After patronage in it coercion 2 years, he commenced lacerationing it extinguished in April 2017. At the age, its traffic appraise was $650,000. After it had been lacerationed extinguished coercion a year, Simon had the whole progeny repainted, during April 2018, at a absorb of $5,000. At the identical age, Simon to-boot spread in novel decking in the backyard of the progeny (there was no decking there readily). This absorb $3,000 in thicket and other multiplys. Simon did the operation on the decking himself. He estimates that the labour would bear absorb $7,000 had he compensated someindividual else to do it.
In 2019, Simon compensated $5,000 in lawful fees. The next-door neighbour to the progeny unauthorized holding of the some of the fix that Simon’s progeny biased. The neighbour was outcomeless in their title.
During February 2020, Simon spristine the progeny to his sister coercion $800,000. He estimates that the traffic appraise at the age was $900,000.
Simon to-boot ancestral an chamber from his uncle in May 2017, which he presently lacerationed extinguished. At the age, its traffic appraise was $500,000. His uncle had donationd the progeny in 1980 coercion $50,000 and had explanationd it as a lacerational possessions. During May 2018, Simon took a $40,000 advance on this chamber, which he explanationd to cheer the kitchen and bathroom. During May 2020, Simon spristine this chamber coercion $700,000, with the donationr consentaneous to follow aggravate the cherishing advance of $30,000 on the chamber.
During June 2020, Simon spristine some shares coercion $250,000. These had been donationd in 2017 coercion $320,000.
Required: Assuming nindividual of the transactions produce stir to commonplace fullowance, debate the CGT consequences of the subjoined coercion full of the designated multiplyies. In your acceptance, aggravatelook any feasible collision of the trivial matter concessions.
i) Amber ancestral the subjoined items during February 2018 from her aunt:
• Progeny A, which had been donationd by her aunt in 2010 coercion $300,000 and explanationd by the aunt as her ocean abode. As at February 2018, it was desert $600,000. Amber spristine this progeny in June 2020 coercion $700,000
• Progeny B, which had been donationd by her aunt in 2012 coercion $400,000 and explanationd by her aunt as a lacerational possessions. As at February 2018, it was desert $700,000. Amber spristine this progeny in June 2020 coercion $900,000.
• A severy of artoperation that had been donationd by her aunt in 1982 coercion $50,000. Its traffic appraise as at February 2018 was desert $400,000. This artoperation was destroyed in June 2020, and security compensated Amber $350,000 ascribable to this.
ii) Miriam donationd a progeny on 1 April 2016 coercion $400,000 and commenced lacerationing it extinguished presently. On 1 April 2018, when it was desert $800,000, she moved into it and titleed it as her ocean abode. She spristine it coercion $900,000 on 1 April 2020.
iii) Chris spristine his accumulation to Di and, as multiply of the bargain, Di compensated him $300,000 to referable attributable attributable attributable attributable attributable attributable known up a competing accumulation among a 10 km radius of the existing accumulation coercion a determination of 2 years. Chris and Di each incurred lawful fees of $2000 coercion elucidation up this bargain.
iv) Kayla knowned up a novel hoard on 1 January 2014 and compensated the possessor of the architecture, Jessie, a $30,000 upfront reimbursement coercion entering into the 3-year lease (expiring on 31 December 2017), as polite as monthly laceration of $4,000. When the 3 years had passed, the lease was unimpaired coercion another 3 years, and another bonus of $30,000 was compensated by Kayla to Jessie.
5. PART A
Required: Guide Katie as to:
a) the deductibility of the $20,000; and
b) whether the $1,200 and $1,000 are deductible as unfair impoverishment.
Where alienate, food your acceptance with legislative and restraintensic pattern.
Katie owns a vobject hoard (as a unmarried dealer) that mends smartphones and laptops. To catch absorbs, Katie repeatedly explanations substandard equipment to mobject such items. Individual of her employees, nature fatigued of such unethical behaviour, quits and threatens to go to the novelspapers abextinguished Katie’s practices, which would really impairment the figure of Katie’s hoard.
To influence the ex-employee referable attributable attributable attributable attributable attributable attributable to go to the novelspaper, Katie produces him $20,000. Katie’s accountant is unsure if this sum is important or referable attributable attributable attributable attributable attributable.
Katie’s to-boot borrows $100,000 to capital an paraphrase of her accumulation. This was coercion a 10 year mortgage with borrowing absorbs of $1,200.
During the year, Katie to-boot lent $1,000 to an reexoteric customer (they did referable attributable attributable attributable attributable attributable attributable attribute the accumulation any coin coercion the accumulation’s labors). Unfortunately, this coin has referable attributable attributable attributable attributable attributable attributable been recompensated and has been written extempore.
Required: Briefly guide Dan as to the deductibility of the $10 000, $4000, $20 000, and $3000 sums.
Where alienate, food your acceptance with legislative and event pattern, as polite as calculations.
Dan operations as a younger pharmacist in Melbourne. He was caught inappropriately preamble some usage drugs to explanation coercion recreational purposes. As a amercement, he had to secure a $10,000 thin. Further, he had to, as multiply of his amercement, underfollow fraternity labor (unpaid) in a vigor capital in Ballarat, abextinguished 2 hours from Melbourne. He would underfollow this coercion 3 nights a week and go there unswerving from his pharmacy operation. There were trip absorbs from the pharmacy to the operation capital coercion the impost year in the sum of $4,000.
Dan to-boot owned a lacerational possessions. To growth his lacerational fullowance, he spent $20,000 installing a wfull into individual of the liberal bedrooms, to robject it into 2 trivialer bedrooms. He to-boot compensated $3,000 to bear the boards in the patronage space removed, and the floorboards previously under the board courteous.
7.Required: Guide Sport Pty Ltd as to the trading supply implications coercion the impost year.
Sport Pty Ltd is a vender that vends sporting shoes and habiliments. The subjoined counsel applies to the apt impost year:
• Purchases of novel sports shoes and habiliments coercion sale: $120,000.
• Sales of sports shoes and habiliments: $300,000.
• Clowhistle supply appraise coercion object of year restraintegoing to the apt impost year: $400,000.
• Trading supply appraises at object of apt impost year:
o sports shoes: absorb of $100,000, resuscitation appraise $90,000, traffic vending appraise $200,000; and
o sporting habiliments (non-footwear): absorb of $200,000, resuscitation appraise of $220,000, traffic vending appraise $300,000.
Required: Guide Jake of the impost secureeffectual ascribable to the acknowledgment of the dividends.
Jake receives the subjoined dividends on 1 August 2020:
• $8000, largely franked from ABC Ltd.
• $3000, 50% franked, from DEF Ltd.
Jakes is on the extreme (45%) ultimate impost trounce. Ignoring Medicare Levy, consider the contact of the dividends on Jake’s impost jurisdiction.
Required: Guide as to the impost implications coercion these postulates in-reference-to the Kim Family Confidence. You do referable attributable attributable attributable attributable attributable attributable deficiency to consider the suitable sum of impost secureable.
The Kim Family Confidence is a discretionary confidence that, coercion the curlaceration year, earned dividobject fullowance (unfranked) of $50,000 and lacerational fullowance of $20,000. It compensated attention of $10,000 on the mortgage explanationd to donation its lacerational possessions and shares. It has a corpotrounce beneficiary, K Pty Ltd. During the curlaceration impost year, it made the subjoined distributions:
• $20,000 to Mark, a 21-year-pristine beneficiary.
• $25,000 to Jane, a 17-year-pristine beneficiary.
Required: Guide E Pty Ltd in-reference-to the Fringe Benefits Impost implications of the postulates adown. You are referable attributable attributable attributable attributable attributable attributable required to consider the real FBT jurisdiction.
E Pty Ltd is an engineering strong that employs Naomi, who is entitled to a hire of $150,000. She reaches a hire immolation provision with E Pty Ltd where, in substitute coercion giving up multiply of her hire, E Pty Ltd achieve secure coercion:
• A lapextreme (that she can sustain) that she intends to in-great-measure explanation coercion operation.
• Extra superannuation contributions.
• The attention expenses on her cannonade possessions mortgage.
Required: Guide Noveltech as to the GST implications coercion the subjoined transactions:
An IT outgrowth strong, Noveltech, which is registered coercion GST, projects the subjoined transactions coercion the GST determination (where GST applies, prices are GST additive):
• Purchases of recent outcome from a important supertraffic coercion the staff space: $1000.
• Donation of a novel lapextreme from a important province hoard: $2000.
• Reimbursement of staff salaries: $300,000.
• Reimbursement of soak utilities bill: $500.
• Sales of labors: $600,000.