Taxation and Related Cases
PART 1 – INDIVIDUAL’S TAX RESIDENCY AND TAX ASSESSMENT 3
ADVICE TO MR. BASIL ON TAX POSITION AND THE ASSESSABILITY 5
PART – 2 ADVISE TO KUMAR 9
REFERANCE LIST 12
The issue in the first case is sit out about the Tax Residency of overseas employee working in Australia and Assessing the Taxable income and Tax liability in regards to Income Tax laws in Australia. It provides insides about Australian Taxation System and Common law cases effects on determination of Taxable income and deductions to different types of income.
The second case is based on taxability of Income and deductions arise from the transactions related to property and its maintenance. It …show more content…
The interest earned in bank account in England by Mr. Basil and his wife is considered as joint income and as both has partnership in that income so both must pay income tax on their part of income. Therefore the half of the English Interest is consider as assessable. • Gain on English Shares: - According section 100-25 of ITAA 1997, Shares are considered as CGT asset. The gain on shares is a statutory income of Mr. Basil as he earned this income from shares bought in 1990. As per Section 100-35 of Income tax assessment act 1997, To Capital gains or losses occur where a CGT asset is subject to a CGT event i.e. the asset is sold more or less than relevant cost and the proceeds are greater than or less than the relevant cost base. the gain on English Shares can be considered either revenue gain or capital gain. If the shares were purchased before 1 year and those shares sold and earned gain, it called as capital gain and it is assessable in Capital Gain Tax. The gain from CGT assets which are held less than one year and due to disposal of asset there is gain or loss, it is consider as revenue gain or loss. In this case, Mr. Basil had purchased English shares in 1990 which suggests that he hold the shares more than one year, so Income from that shares is consider as Capital Gain and it is assessable under CGT which deals 50% flat tax free gain (as per Section 102-3) and other part of 50% is assessable. Here, Mr. Basil had gained A$