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HI6028
TAXATION THEORY, PRACTICE AND LAW
FINAL ASSESSMENT
TRIMESTER 3, 2021
Assessment Weight: 50 total marks
Instructions:
• All questions must be answered by using the answer boxes provided in this paper.
• Completed answers must be submitted to Blackboard by the published due date and time.
Please ensure you follow the submission instructions at the end of this paper.
Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit.



Question 1 (11 marks)
Jack is an accountant for an international accountancy firm based in Fiji. He has investments in Fiji comprising of his own home, a rental property, shares in local companies and cash deposits in high interest-bearing bank accounts. On 1 February 2020, Jack was transferred to the firm’s Brisbane office on a temporary three-month secondment. The purpose of the secondment was to establish networks with existing Australian clients that have indicated the possibility of investing in Fiji. During the secondment period, Jack remained an employee of the Fiji office, and his salary was paid into his Fiji bank account. While Peter’s intention was to return to Fiji at the conclusion of his secondment, he sought and was successfully offered a permanent position in Brisbane. In early June 2020, he became an employee of the Brisbane office. His relocation involved purchasing an apartment in the Brisbane suburb of Ascot, renting out his own home in Fiji and transferring a sum of cash to a high interest-bearing bank account in an Australian bank. Discuss residency and source issues. (Maximum 500 words)
ANSWER: ** Answer box will enlarge as you type
Question 2 (7 marks)
Sam is an employee at a large land development company. He has negotiated car benefits with his employer. Sam was provided with the car for the period 1 April 2020 to 31 March 2021. The leased car value was $22,000 on 1 April 2020, and the car had only been leased for a year at that time. Sam is required to pay for any petrol and other maintenance costs, which he has determined to be $1,300 for the period 1 April 2020 to 31 March 2021.
Advise Sam’s employer as to the FBT consequences (using statutory formula method) arising out of the use of the car. You may assume that any benefits are Type 1 fringe benefits. (Maximum 300 words)
ANSWER:
Question 3 (11 marks)
Divanee is a Neurosurgeon at the local hospital. However, the long hours have been very draining, and she has decided to take a leave of absence from the hospital and pursue her interest in blending coffee beans to find the perfect taste. She has incurred the following expenses:
a) Payment of $5,000 to the Australian Society of Neurosurgeons (Divanee has decided to maintain her membership during her leave of absence in case she decides to go back to work as a surgeon);
b) Donation of $500 to Medecins Sans Frontières (a registered Deductible Gift Recipient);
c) Donation of $1,000 to her local neighbourhood community house (a registered Deductible Gift Recipient). All donors are permitted to book the function room in the house for free up to 3 times per year. The normal booking fee would be $250;
d) She paid $500 for Newspapers which covered some health-related information; and
e) Travel cost $2,500 to attend a global conference in London.
Advise Divanee as to her income tax consequences arising out of the above information. (Maximum 400 words)
ANSWER:
Question 4 (7 marks)
Over the last 6 months, Rohan acquired the following assets:
- an engagement ring which cost $5,000
- a ceramic antique vase (for $3,000),
- a painting (for $8,500),
- a Television (for $15,000),
- Australia Bank’s shares (for $5,000).
Last week he sold these assets as follows:
- an engagement ring which cost $6,000
- a ceramic antique vase (for $1,000),
- a painting (for $2,500),
- a Television (for $11,000) and
- Australia Bank’s shares (for $25,000)
Calculate his net capital gain or net capital loss for the year. (Maximum 300 words)
ANSWER:
Question 5 (7 marks)
What is a base rate entity? And what rates of tax are payable by these entities? (Maximum - 200 words)
ANSWER:
Question 6 (7 marks)
In what circumstances can a taxpayer challenge an assessment outside the ordinary appeal process. Discuss based on statutory and common law. (Maximum 200 words)
ANSWER:
END OF FINAL ASSESSMENT
Submission instructions:
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