LAWS4003-Advanced Tax Law in Autumn - Law Assignment Help

Assignment Task

Task

QUESTION 1.

Your client Julie is an investor and antique collector. You have ascertained that she is not carrying on a business. She tells you:

a) In 2002, she purchased 10,000 Big Pharma (BPH) shares for $3.00 each. She sold all the 10,000 BPH for $11.50 each on 1 April this year.  

b) In 2010 she purchased a Rolex Daytona diamond and ruby encrusted watch for $70,000. She sold the watch on 1 February this year for $15,000. She wore the watch on her wrist while she owned it. 

c) In 2002, she purchased her yacht – the Friday Freedom in Fiji for $20,000. She sold it, in Australia, on 1 March this year for $5,000.

d) When she was born in on 1 October 1984 her parents purchased 100 CBA shares for her valued at $13.00 each. She sold all these CBA shares this year for $10,400.00    

e) On 27 January this year Julie purchased 1000 WBC Shares for $20.00. On 24 March this year Julie sold the WBC Shares for $24.00 per share.

Julie tells you she has never claimed any capital losses in the past. She wants to know the tax consequences of all these transactions. Advise Julie on the cost base, capital event and capital proceeds for each sale and calculate any carried forward capital losses showing references to appropriate legislation and all calculations. Do not consider dividend payments in your answer Ensure you refer to applicable legislation and case law in your answer.

QUESTION 2.

Michael, who was born on 1 May 1972 has since 1 July 1993 worked as a sales representative (rep) with Orbital Pty Ltd (OPL), an Australian company based in Victoria selling milking machines for the dairy industry. In view of a downturn in the industry, on 1 October this year OPL offered Michael, who was the longest serving employee, the following early retirement redundancy package:

a) 200 hours unused long service leave valued at $16,000 ($80 per hour)

b) 75 hours unused annual leave valued at $6,000 ($80 per hour)

c) Golden handshake: $180,000

d) Unused Sick leave: 400 hours ($80 per hour)

At the time of the redundancy offer Michael was on a $140,000 per-annum salary that included a 10% SGC employer superannuation contribution.
Required: Advise Michael on the tax consequences in general and how these differ if he were to take the offer as a lump-sum cash payment or roll it over into his superannuation fund.
Required: your answer must be supported by relevant legislation or cases or Rulings and show any relevant calculations and include any assumptions you make.

QUESTION 3.

From 1 July 2021 to 31 December 2021 Malik is in Australia on a Subclass 500 Student Visa (Temporary). On 1 January 2022 Malik obtains permanent residence visa in Australia. Malik tells you for the year of tax ending 30 June 2022 he:

a) Earned $500 each week working 20 hours per week at Hungry Jacks. Hungry Jacks paid to the ATO $1,404 PAYGW tax on Malik’s behalf 

b) Received $15,000 from a rental property he part owns in Bangladesh.

c) To 30 December 2021 earned $3,000 selling fantasy micro novels he authors on I-Books. Apple deduct 30% tax paid to the US-IRS on Malik’s behalf.     

d) From 1 January to 2022 to 30 June 2022 he earned $6,000 from selling micro-novels on I-Books.     

All amounts are in Australian dollars. Advise and explain to Malik what is to be included in his Australian tax return, if any.  Your answer must explain what is not to be included and why it is not to be included.   Finally, you should advise Malik of any credit he may get, for the year of tax ending 30 June 2022.  Your answers must be supported by reference to relevant legislation, case law and/or tax rulings and agreement.
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QUESTION 4.

Monica, aged 54, is employed as a Senior Manager with Abacus, a large accounting firm based in Sydney. During the 2022 tax year Abacus contributed $23,568 SGC into Rest Super, Monica’s complying Superannuation Fund of choice.

For 2022-2023 Monica is considering entering a salary sacrifice arrangement with Abacus to sacrifice 20% of her 2022-23 salary of $250,000 per-annum into superannuation. This will result in an additional contribution of $50,000 for the 2023 year of tax. If she agrees, this will be the first time Monica has made a salary sacrifice arrangement. Monica knows her marginal tax rate is otherwise 45% (excluding Medicare Levy). Her superannuation balance on 30 June 2022 was $800,000.

Advise Monica and Abacus (if any) income tax consequences arising in relation to the benefits of the above proposed salary sacrifice arrangement? 
Your answer must be supported by reference to relevant legislation, case law and/or tax rulings.

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