Introduction
This assignment is divided into four parts following the sequence of the assignment questions. In the first part, I discuss the assessibility of payment from school; the second part is about the accessibility of devices offered by the school; in the third part, the deductibility of expense on breakfast of students is discussed, and the last part is about the profit making from an agreement.
1. Payment for teaching
1.1 Annual salary
According to s 6-5 of the ITAA Act 1997, the annual salary of 78,000 to Maxine is obviously an ordinary income, as this payment was given by her employer for her employment as a full-time teacher.
1.2 “extra duties allowance”
Maxine was paid an “extra duties allowance” amount to $1320 for the 2012-2013 income year, as being the coach of the Australian rules football team.
The allowance was of an income nature. There was a sufficient nexus between the taxpayer`s receipt and her employment, as the reward was given for her employment or service as a coach.
The “allowance” was weekly paid to Maxine for her service as a coach. While it was only paid during the football season, it still had the character of periodicity, recurrence and regularity. While it is relevant, it is not decisive.
Thus, this allowance received by the taxpayer was assessable under both s 6-5 and s 15-2 of the ITAA Act 1997. However, according to the negative limb of s 15-2 (3) (d), the assessable amount under s 6-5 cannot be included in s 15-2 to avoid double tax. In conclusion, the allowance is assessable as ordinary income under s6-5.
The Research paper on Coaching & Mentoring
If one were to survey a panel of CEOs and executives and ask them what their most important asset is they would say, People. If one were to ask that same panel of leaders what the one thing they lack in their organization the answer would probably be trained and developed personnel. While many organizations spend countless of dollars on training, seminars and development courses, others tend to ...
2. Electronic device for work
Maxine was given a tablet and a laptop by the school to assist her with her work duties, and she had these devices as private property.
The ATO may claim that the devices are assessable income under both s 6-5 and s 15-2. First, though the rewards were not in cash, they were convertible into cash at a value of $800 (tablet PC) and $2000 (laptop) respectively. Secondly, it was included in her remuneration package and aimed to help Maxine with her work, which displayed a sufficient nexus between the benefit and her employment as a teacher.
The taxpayer, Maxine, may argue that these property benefits fell within s23L (1) of the ITAA Act 1936 which treated fringe benefit as non-assessable, non-exempt income. The benefits constituted “fringe benefits” under s136 (1) of the FBTA Act 1986. While the payments of “salary and wages” within the definition in s 221A (1) would be excluded in Para (f) of the s136 (1) definition and would not be fringe benefits, she can contend that the devices were not “salary or wages” because:
* Although the devices were given to the taxpayer as her property, which means she had the right to dispose of them and they were convertible into cash, they were not likely to be a real salary or wages paid to the employee for what she did in employment and the act of converting them into cash would be controversial at school.
* Since the employer-school- bought the devices and provided them to its employee, they were not only for the payment of the employment but were also intended to enable the employee to improve efficiency in the future work.
The property benefits satisfied the definition of the “fringe benefit” in s136 (1).
Meanwhile, the devices were eligible work related item which fell within s58X (2) (a) as she primarily used the devices for work purposes. Therefore, the property benefits were exempt benefits under s58X (1), and they were exempt from FBT.
While the ATO may refuse the exempt FBT and claims that the laptop was a “later items” according to s58X (3), she can argue that the laptop was provided to her because the former item was not sufficient for her work and obviously it was unable to perform substantially identical functions to the laptop.
The Essay on Purpose And Benefits Of Planning Work
Explain the purpose and benefits of planning work, and being accountable to others for own work. When you plan your work beforehand, you can get a rough idea of how long it will take to do each task so that you don’t fall behind. It allows you manage your time effectively so that you can meet any deadlines that you have been set. This enables you to manage your own performance and complete tasks ...
In other words, the electronic devices were exempt benefits and were not assessable.
3. Deduction
Maxine spent $580 for the breakfast of four students.
The ATO may deny this deduction for the following reason: She bought her students the meals using her own money and it was of a private nature. It was just a moral behavior and she did it because of individual willingness. Then, under the negative limb of s 8-1 (2) (b), the expense was not deductible.
However, the four students without having breakfast had trouble concentrating and they disrupted the class. Maxine was not able to find help from the school fund or from the parents of the students. So she had to buy the students meals so as to solve the problem and to maintain a normal teaching order. She made this expenditure to fulfil her eligible work. There was a sufficient nexus between the expense and her earning activity. Therefore, it was an outgoing of gaining or producing her assessable income under s 8-1 and the $580 should be wholly deducted.
4. Payment for agreement with property developer
Due to the advice from her friend, Maxine was paid $20,000 by the property developer for the written agreement of withdrawing objection about the development made by the developer.
Maxine purchased the residential rental property, and if she leased the property the income was an income from property and was assessable as ordinary income. Before raising her “objections” about the proposed development, there was no implication that she was in somewhat of a business.
The taxpayer was not carrying on a business making profit, and withdrawing the right of objection to return was a one-off transaction. Due to the Whitfords Beach case, a wide range of transactions was exposed to s 25 (1).
Later the decision of Myer is a milestone for judging one-off business transactions. Nevertheless, those do not mean that every one-off business transaction fell within s 6-5. According to the Taxation Ruling of TR92/3 (35), if a taxpayer not carrying on a business makes a profit, it would be income if it satisfies both of the following rules:
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* “The intention or purpose of the taxpayer in entering into the profit-making transaction or operation was to attain a profit or gain”. As the taxpayer admits that she would not have raised objection if her friend (Jasmine) had not told her for “a buck”, it is convinced that she entered into the traction with motive to make profit.
* “The transaction was entered into, and the profit was made, in the course of carrying on a business or in carrying out a business operation or commercial transaction. “In the case of Californian Copper Syndicate v Harris, the syndicate purchased the mining property for the purpose of resale at a profit. And in the Whitfords Beach case, the develop company purchased the share and owned the beachfront land not for previous use but developed the land as a residential subdivision and sold for profit. The transactions in the two cases were treated as business operation or commercial transaction. However, Maxine`s operation was not similar to the previous two cases as she bought the property long before the appearance of the developer, and it was not likely to be purchased for the transaction. Nor did she make any operation on the property aiming at making the profit in the transaction. All she did was to raise an objection directly to the developer under the reminder of her friend, and it was not likely to be a business operation or commercial transaction.Therefore, the profit of $20,000 was not assessable as ordinary income.Once the taxpayer signed the agreement with the developer, she enters into a contractual agreement on withdrawing objection to the property rebuilding application, and the CGT event D1 occurred. The profit of the contract is assessable income under the CGT regime. |
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The Business plan on Malincho Case Study Analysis
Kalin is a Bulgarian entrepreneur. He tried to establish a business from a scratch. This case is about a start up business and challenges arising out of a new business.Kalin were an inexperience entrepreneur but his determination led him to success, starting with scares resources. Kalin a Bulgarian national, started a new business as a fresh graduate he don’t have any savings. He started his ...
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[ 2 ]. FC of T v Cooke and Sherden 80 ATC 4140.
[ 3 ]. Dean & Anor v FC of T 97 ATC 4762.
[ 4 ]. Subsection 58X (2) of the FBTA Act of 1986.
[ 5 ]. Subsection 8-1 (2)(b).
[ 6 ]. FC of T v Whitfords Beach Pty Ltd (1982) 82 ATC 4031.
[ 7 ]. FC of T v the Myer Emporium Ltd (1987) 87 ATC 4363.
[ 8 ]. Californian Copper Syndicate Ltd v Harris (Surveyor of Taxes) (1904) 5 TC 159.
[ 9 ]. Subsection 104-35(1) of ITAA Act of 1997.
