Question Explain the Tax formula for calculating tax liability

This can be calculated from the taxable income. then this income will be minus from the tax deduction and it will be equal to gross tax liability. It is given by

After this in the next step, the gross tax liability will be minus from the tax credits then it will be equal to the total income tax liability of the person and it is given by

From this equation, the tax credits are according to the related corporation. This means if your company belongs from C category then tax credits will be about 21% according to ITAA97.

Question 2

a.       Yes, it is true that $80000 received from Silla form part of Defence’s ordinary business income. The main reason was that it was a part of a contract. According to the case of Ramsgate Victoria Hotel v Montefiore (1866) LR 1Ex. This case was related to termination of offer. But in this case, contract was cancelled due to community lobbing so Silla had to pay the price according to given scenario.

b.      No, my answer will be same. The main reason is that there are many suppliers of this company in the market. Moreover, this company is using laws to overcome its problem so there will be no problem if Silla is not supplying parts.

Question 3

a.       According to the given ITAA act 1997, the capital proceeds is related with extent number H2. The scenario is telling that Jasmine was selling her investment properly to her spouse at price rate of $150000 by now the investment rate is different and its value will become $325000. This is showing that the money of the asset will be given to Jacob because he is the owner of the asset according to the ITAA act 1997 of capital proceeds.

b.      According to the income tax assessment act 1997-Sect 30.205. It is showing that the amount written on the contract will be given on time by the member. This means that Vivi has to pay out the amount on 1^st sept.

c.       According to the income tax assessment ACT 1997-Sect 284.55. It can be noted that Mark has to repay Pierre payment about the given painting because it was not original.

Question 4

The five elements of the costbase of CGT asset are given below

1.      Money paid or property given for the CGT asset

2.      Capital cost to increase or preserve the value of the asset and to install and move it

3.      Incidental cost of the CGT asset that is related to the CGT event

4.      Cost of owning the CGT asset

5.      Capital cost of preserving and defending your title right present in the CGT asset.

Part C

Scott v federal commissioner of taxation [1966]

According to the case, I am agree with the proposition. This is because according to the case, the taxpayer had received complete professional fee according to the service and gave them a gift of £10000. The main issue was that client was extremely pleased from his advice. Due to the he gave him extra money as a gift. The next thing is that according to the case, the taxpayers are had received their professional fee for his service as a gift. Due to this the court had said that this gifted money was not measureable. This is completely against the ITAA act of 1997. Moreover, it is considered as unsolicited gift given by the other member. The next thing is that it is not a part of income.

Now the next fact is related to the Roger’s case. It is showing that he had received about $7000 according to his advisory services. According to his services he had receiver a gift of $2000. Due to this money, it can be seen that the amount of $2000 was still considered as unsolicited gift from the person. This shows that it is not considered as legal activity from the respondent. Moreover, it is the fault of the taxpayer why he had paid this money to him. It is against the law. This is the reason why the court has made correct decision according to this act.