BLO2206 TAXATION LAW AND PRACTICE
ASSIGNMENT
SEMESTER 2 - 2017
INSTRUCTIONS
LENGTH: 2000 words.
SUBMISSION: The assignment is an individual piece of work. The only method for submission of the assignment is as a soft copy. The soft copy is to be uploaded to the collaborate web site for this unit in the assessment dropbox. If for some reason you cannot upload the assignment by the due time email your soft copy to Ian Henry, or if an extension has been granted to Yongqiang Li.
EXTENSIONS An extension will only be granted on medical grounds.
LATE PENALTIES: Late penalties will be applied.
REFERENCING: Referencing can be any acceptable method, however footnoting is preferred
PLAGIARISM: All assignments will be submitted to plagiarism software for checking. Please familiarize yourself with the university plagiarism policy.
VALUE: The assignment represents 30% of the mark for this unit. Both questions must be attempted.
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PART A
Robyn Rainer worked as a lecturer with Victoria University in the college of business. The college of business ran a number of courses in Calcutta University, India. An employee of Victoria University was coordinator of the Indian course and was situated in Calcutta. Until November 2016 Jason Holm was the coordinator situated in Calcutta. He resigned from Victoria University in November 2016 and returned to Australia. Expressions of interest were called for from staff in the college of business in Australia to be the new Victoria University coordinator in Calcutta. Robyn put in an expression of interest and was successful. She was not married and she saw this as an opportunity to advance her career by acting as coordinator for a number of years. She started this new position on 14 January 2017. The position of coordinator in Calcutta was for as long as Robyn wished to remain in the position or as long as the course was conducted in Calcutta. Victoria University owned a flat in Calcutta for the use of the coordinator whilst in Calcutta. On arrival Robyn established a bank account in India and had half her salary paid into the Indian bank account. The remainder of her income was paid into her Australian bank account for purposes of being able to pay for the mortgage on the flat she owned in Melbourne. She had rented the flat in Melbourne for a period of 12 months.
Can Robyn be taxed on any part of her salary, from Victoria University, in Australia for the 2016/17 tax year and any other years she acts as coordinator in Calcutta. Fully explain your answer. Ignore the operation of double tax agreements.
[15 marks]
PART B
Paul ran his own business as a golf instructor. He charged clients in two ways. First, as a lesson was given and second, by advance payments for a period of 12 lessons. Paul had an arrangement with the Eastwood Golf Club to give lessons to members of the club who wanted the occasional lesson, or visitors who had never played golf before and wanted a single lesson before playing a game of golf whilst visiting. In these instances Paul would charge on a single lesson basis. Paul also had a number of clients who would book a series of 12 lessons with Paul. These clients he would have pay for the 12 lessons in advance, although he advised he would refund any amount where a client could not attend a lesson. As regards the 12 lessons, Paul started classes at the beginning of March and commenced a new class each 3 months thereafter, starting the last 12 week period at the beginning of September. At 30 June 2017 Paul had received $6,000 from the giving of private lesson and $28,800 from the giving of the series of 12 week lessons. Paul restricted the number of students who he took into his 12 week course to 20 per course and charged $40 per lesson.
In February 2017 Paul accidentally damaged David’s golf buggy. Paul agreed to repair the buggy for David. The only way Paul could afford to pay for this was to have two of the people he was going to give lessons to over the next 12 weeks (beginning in March) pay for the repairs rather than pay their fees to Paul. Unexpectedly Paul received a $10,000 payment from Doreen in June. Paul had taught Doreen golf some 5 years earlier. Doreen recently won a major golf tournament winning $60,000. To show her appreciation to Paul for his excellent teaching she had given him the $10,000.
Determine what amounts will form part of Paul’s assessable income for the 2016/17 taxation year. Fully explain your answer.
[15 marks]