LAWS19033 Taxation Law and Practice A
Term 1 2014
Assessment item – Written assignment
Due Date: Monday 28 April 2014 (Monday of Week 9)
Assessment weighting: 30%
Length: 2 000 – 2 500 words
This assessment relates to the course learning outcomes as set out in the Course Profile. This assessment must be submitted online via Moodle.
Please submit one (1) Word document only. Please feel free to research as widely as possible when preparing for this assignment. However, all sources for your research must be appropriately referenced using the Australian Guide to Legal Citation.
Joe Jones and his wife Donna have come to you for advice in relation to taxation matters. It should be noted that the information provided represents their understanding of what may be relevant for income tax purposes, and you will need to form your own judgment on the various matters based on your knowledge of Australian income tax law. If any doubt arises on a particular point, or further information would normally be required, you may assume such further details as are necessary to provide advice. All such assumptions, and the basis of any decisions you make in various matters, must be made clear by a full discussion where appropriate.
Joe is employed as a boilermaker at Mining Matters (MM) in the Bowen Basin in Queensland. In the 2013/14 financial year, he has received wages of $70 000, including overtime payments of $25 000for the year. In addition, Joe has been paid a bonus of $5 000 for his contribution to a large successful work project that was completed during the year. The bonus was received on 10 July 2014.Joe also receives a tool allowance from MM which he uses to purchase hand tools necessary for his work. MM supplies Joe with work boots, work shirts, and work pants. The work shirts and work pants are embroidered with the company name. During the year Joe was awarded a lifetime membership of the Australian Metal Workers Union, for which he pays membership of $50 per month. To acknowledge his outstanding service and progression to lifetime membership the union presented him with a plaque engraved with his name, worth $200.
Joe also owns a small business which is managed by his brother-in-law, Ted. Ted is a graphic designer and when he was out of work Joe decided to put his money into setting up a design business for him. The business runs out of a small office in Kent Street in Sydney. The rent is high but Joe was offered a significant lease incentive to enter the deal.The office has also been subject to a complete refit which Joe paid for.This included new office furniture and new floor coverings.Joe was assured that these costs will offset against his salary so he was happy to go ahead.Ted only works 3 days a week but Joe feels obliged to pay him well so he pays him well over the going rate for a graphic designer.This means the business runs at a loss.But Joe thinks this is okay as he should be able to offset the losses against his salary.
Joe also has a rental property that he owns.Joe purchased this property in July 1984.Joe receives rental income from the property of $15 000 per year and pays a management commission of 4.5% to Ray White Real Estate.Over the years the property has become run-down and is in desperate need of repair.A number of repairs were completed in the period 1 July 2013 to 30 June 2014 including:
•Replacement of the old wooden steps with new concrete steps.Some of the old steps were suffering from wood rot;
•Repainting the exterior of the house;
•Repairs to the front and back doors where they were damaged by burglars; and
•Installation of air conditioning units in the bedrooms and lounge room.
Joe has a painter booked for additional work in July 2014. This work is expected to cost around$10 000.Joe receives additional income from monies invested in a term deposit with the Commonwealth bank.Interest is paid quarterly from this account.Joe has two sons, John and David.John attends the local primary school while David attends a secondary school in Brisbane.Joe spends a lot of money on the boys’ schooling including stationery, textbooks, school fees, uniforms, and travel to and from school.Joe also maintains a computer and an internet connection for the benefit of the boys to enable them to complete their homework.John is a sickly child and he requires many visits to specialists in Brisbane, which are also very costly.Joe estimates that he has spent about $4 000 on doctor’s visits for John this year.Net of private health insurance refunds the amount is around $1 500.He has heard from his friends that he may be able to get a tax deduction for these expenses and he is keen to claim this expense.Private health insurance premiums also cost Joe another $4 000 during the year.Joe’s wife Donna is unable to work at the moment as she needs to spend a lot of time caring for John.Donna receives limited income from social security including carer payment. However, during the year she was able to gain some money from the sale of a painting that was given to her by her mother when she passed away in 2006.Her mother had acquired the painting in 1984 for a sum of$5 000.In 2006 when Donna inherited the painting it was worth $15 000.Donna needed the money for the painting urgently to meet some of their ongoing expenses and sold the painting to a friend for an amount of $12 000.
(i)Advise MM on any taxation matters arising from their dealings with Joe.
(ii)Advise Joe on any taxation issues that arise in relation to his circumstances.
(iii)Advise Donna on any taxation issues that arise in relation to her circumstances.
When completing this assignment please refer to ITAA36 and ITAA97, cases and Rulingswhere required. Please set out your assignment in a manner that makes it easy to read and follow eg. use subheadings where possible to denote the issue that you are referring to.
The footnote or endnote system is the preferred method of referencing in legal writing. When you use this system you are able to reference and expand on your arguments in the footnotes, without breaking up the flow of the assignment. When making a reference, cite the original source or authority in preference to a secondary source such as the textbook especially when you are discussing various sections of the legislation. The style guide for the footnote system to be used is the Australian Guide to Legal Citation.
Do not exceed the word limit if you can possibly avoid doing so. You may find that you have written too much so it is probably worthwhile to edit your assignment so that it is more tightly structured. Some of the information you have included in the text may be better placed in the footnotes.
Criteria and marking guide
Characteristics indicative of the respective levels of achievement in the assignment are as follows. Sometimes not all features will necessarily be present in any one assignment for that particular grade.
These criteria are a general guide as to the standard expected at the various levels. It is not necessarily the case that all these criteria will be met at a particular standard as there may be a superior performance on one of the criteria and not-so-satisfactory performance on another.
High distinction standard
•The answer is very well written and clearly, expressed
•There is a demonstrated appreciation and understanding of the issues involved
•The answer is well structured and logically organized
•Demonstrated mastery of referencing system
•There is evidence of a comprehensive analysis of the issues
•Conclusions are backed by well-reasoned arguments demonstrating a detailed insight and analysis of issues
•Comprehensive coverage of all relevant issues
•References are made to the appropriated legislation for particular issues
•Statutory provisions are analyzed and interpreted correctly
•The legislation is applied to the particular fact situation in a competent manner
•Consideration is given to the operation of the common law
•There may be consideration of issues not raised in the tutorials and answer guides
•The answer is well written and expressed
•The answer is structured and logical
•The issues have been reasonably well identified and appreciated
•There is correct use of referencing
•Issues have been analyzed
•Reference is made to all appropriate legislation, although the analysis and interpretation is not as detailed and reasoned as for the high distinction standard
•The effect of the common law is considered
•There is comprehensive coverage of the issues
•Occasional errors of law and legal reasoning may still be present
•The answer is generally well written and expressed
•The answer is structured and sequential
•Referencing is satisfactory
•Issues are identified and addressed
•There has been an attempt to analyze some of the issues
•The coverage of issues is reasonably comprehensive often with good treatment and analysis of particular points
•Errors of law and incorrect reasoning may sometimes be present
•Statutory interpretation may require improvement
•Depth of treatment is often lacking in some of the issues
•The answer is able to be followed and understood
•The answer could perhaps be better organized and structured
•The referencing may need improvement
•Issues may need to be identified and addressed in more depth