Taxation and Related Cases Essay

2187 Words Apr 26th, 2011 9 Pages
TABLE OF CONTENTS
INTRODUCTION 2

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

CONCLUSION 11

REFERANCE LIST 12

INTRODUCTION

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
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The ordinary incomes of Australian resident are assessable under Income tax act. • Motor Vehicle: - According to section 136 of Fringe benefit tax assessment act 1986, Fringe benefits tax is a tax placed on benefits provided by an employer to an employee. The benefit is given a money value and inflated to reflect a pre tax value, then taxed at a flat rate of 48.5% in the hands of the employer. As motor vehicle is provided by the employer of Mr. Basil, it is considered as fringe benefit to him and it is totally exempted from assessable income. • Phone Account: - As employer of Mr. Basil pays the half of phone account, it considers as the benefit to Mr. Basil but it is consider as fringe benefit and it is totally tax free for him. • Holiday: - As a performance award from his employer Mr. Basil received trip to Hong Kong, as it’s a part of employment it is also consider as fringe benefit to Mr. Basil and it is consider as non taxable. • English Rent: - Mr. Basil and his wife jointly own the house in England so they both are under partnership agreement and income from that house must be divided equally between them. So that $A400/month is consider as Mr. Basil’s taxable income. • English Dividends: - As it is normal income it is also included in to assessable income but if paying company had paid tax before paying dividends, Mr. Basil can get tax offset up to that much. • English Interest: - According to Section 6-5 of Income Tax Assessment Act
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