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LAW6001 Assessment Brief 3 Case Study T1 2019.Docx
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ASSESSMENT BRIEF
Subject Code and Title LAW 6001 Taxation Law
Assessment Assessment 3: Case Study
Individual/Group Individual
Length 2000 words +/_ 10%
Learning Outcomes This case study must be presented as an individual effort. The
case study requires individual research. The course manual
and set texts are intended to be the starting point of the
research. It is expected the student will survey the relevant
literature, including decided cases, and select appropriate
additional resources.
The case study is designed to incorporate uncertainty. The
student is expected to develop a piece of work which is
written advice for their client. It must therefore identify the
facts and issues presented by each aspect of the case study,
identify and apply the relevant legislation and/or case law,
come to a conclusion and make a recommendation to the
client.
Specific learning outcomes
b) Explain ethical and professional responsibilities of tax
agents under the including obligations under the Tax Agent
Services Act 2009 (TASA) and Tax Agent Services Regulations
2009 (TASR).
c) Interpret and apply selected sections of the Income Tax
Assessment Act ITAA36 and ITAA 97.
d) Identify and analyse the tax treatment of various types of
income and deductions.
e) Effectively apply taxation law in determining tax outcomes
in various scenarios and structures.
Submission By 11:55pm AEST/AEDT Sunday of Week 10
Weighting 20%
Total Marks 50 marks

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Context:
This assessment assesses your research skills, your ability to synthesise an original piece of
work to specific content requirements and your ability to produce a comprehensible piece
of advice which addressing the client’s needs.
It also assesses your written communication skills. The ability to deliver to a brief is an
essential skill in the workplace. Clients may well approach advisors seeking a combination of
specific information needs and advice on the tax implications of a particular arrangement in
the Australian tax jurisdiction. It is therefore important to be able to identify all the issues
presented by an arrangement and to think about the potential consequences of different
approaches to addressing the client’s needs.
Instructions:
Your case study needs to identify and discuss the tax implications of the various issues
raised. In order to produce your case study, you will need to review relevant case law and
legislation. The subject manual and set texts are starting points only, you will be expected
to use these initial materials to identify potential useful resources. You will then need to
review your selected resources to see if they value add to your analysis.
Your case study is not just a list of answers. Your reasons for your conclusions and
recommendations must be based on your research into the relevant cases and legislation.

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Question 1 (6 marks)
Explain the:
a) Constitutional basis of the Australian taxation system, ie what section(s) of the
Australian Constitution confer taxation powers?
b) role of the Courts, the parliament and the ATO in developing taxation law in terms of
the theory of the separation of powers in government
Question 2 (9 marks)
A non-resident manufacturer based in the US derives profits from sales to Australian
customers. The US manufacturer has a sales representative in Australia operating out of a
serviced office, and this sales representative has been instrumental in obtaining orders from
Australian customers.
Required
With reference to the relevant Double Tax Agreement determine whether the profits from the
Australian sales by this US manufacturer taxable in Australia?
Question 3 (15 marks)
Indianna is a resident individual taxpayer. She owns 22 hectares of land which has always
been used for producing assessable income. She decides there is no longer the return
required from owning the land and so she has decided to develop the land into residential
housing.
She has thought about the three following scenarios:
a) Indianna undertakes all the activities necessary and sub-divides the property into 80
lots in addition to her 2 hectare area personal use area where the family home is
situated. She then sells all 80 undeveloped blocks to a property developer
b) Indianna undertakes the same activities as above and holds an auction day to auction
off all 80 blocks as separate packages to the highest bidders
c) Indianna does not subdivide the land and sells the land as an entirety to a development
company, and pays a fee to the development company of 65% of the total sale
proceeds for carrying out the entire development on her behalf. All of the balance is
to be paid to Indianna on the sale of the last block.
Required
Part 1
As Indianna’s tax advisor explain the potential assessable income issues involved for each
scenario if:
a) The property has been owned by Indianna since 1 November 1976
b) The property has been owned by Indianna since 1 November 1986

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Part 2
The land development project is likely to take place over at least two financial years. Discuss
when Indianna will derive any assessable income she receives from each of the three
scenarios.
Question 4 (10 marks)
Amity was looking for a life style change. She tired of the city life and decided she would like
to develop an accommodation business in the Adelaide Hills. So she sold her catering
business three years ago and found the perfect tract of land for sale. She investigated the
zoning requirements and was advised by the council zoning should not be an issue.
As a result she entered into contract to purchase the land for $3m and paid a deposit and two
instalments whilst interest accrues on the unpaid amount. He also bought some cattle and
alpacas to run on the land. She intended to sell alpaca wool and occasionally sell a couple of
the animals. The animals would all be sold once development was underway.
She engaged a team of architects and developers to plan the development and when the
plans are drawn up she applied to the council for zoning permits. The council refused the
request.
2 years ago following discussions with the council a further modified proposal was submitted
to council who approved “in principle”.
Amity decided to bring in a partner and 18 months ago sold a quarter of her interest to Archie.
During all of this time horses had been agisted on the land, and along with small amounts from
cattle and alpaca sales, this was the only income earned.
However, Amity and Archie had a disagreement over the development and in disgust Amity
sold her interest.
Required
With reference to applicable legislation and case law determine whether Amity is entitled to
claim the interest on the loan as a deduction over the three year period?
Question 5 (15 marks)
Maurice is an individual tax resident of Australia for tax purposes. He has the following assets:
His home was acquired on 20 February 1989 for $140 000. The home was never used
for any income producing purpose. The estimated market value of the house on 1
March 2018 is $310 000
Shares in FUL Pty acquired on 10 April 1984 at a cost of $15 000.
Furniture acquired on 20 May 2010 for $9 500.
Block of vacant land acquired on 20 June 1997 at a cost of $100 000. The estimated
market value of the vacant block on 15 May 2018 is $475 000.
Maurice subsequently sold the following assets:
His home was sold on 1 March 2018 for $325 000
The FUL Shares were sold on 15 March 2018 for $19 000
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The furniture was sold on 1 May 2018 for $5 000
The block of vacant land was sold on 15 May 2018 for $465 000.
Maurice also has a carry forward capital loss of $12 500 from the sale of an antique drumkit
and a carry forward capital loss $5 000 from the sale of underperforming shares in an earlier
income year. Maurice is not a share trader.
Maurice has also incurred interest expenses on the vacant block of land of $110 000 over the
time he owned the vacant block. He never used the vacant block for any income producing
purpose.
Required
With reference to relevant legislation and cases calculate the net capital gain or loss as
applicable for Maurice for the 2017/18 income year.
Question 6 (10 marks)
Source two articles from the Australian Financial review or similar resource.
For each article provide:
a) a precis of the relevant facts in the article
b) a concise explanation of the taxation concept(s) discussed
c) an explanation of the connection between the concepts discussed in the article and
the indicators of good tax policy.
Question 7 (5 marks)
Comment, with reference to the Tax Agent Code of Conduct, on the role the tax advisor has
in ensuring their client’s compliance with all relevant taxation laws.

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Learning Rubrics

Assessment
Attributes
Fail (Unacceptable) (Functional) Pass (Proficient) Credit (Advanced) Distinction High Distinction (Exceptional)
Grade Description
(Grading Scheme)
Evidence of unsatisfactory
achievement of one or more of the
learning objectives of the course,
insufficient understanding of the
course content and/or unsatisfactory
level of skill development.
Evidence of
satisfactory
achievement of
course learning
objectives, the
development of
relevant skills to a
competent level, and
adequate
interpretation and
critical analysis skills.
Evidence of a good
level of
understanding,
knowledge and skill
development in
relation to the
content of the course
or work of a superior
quality on the
majority of the
learning objectives of
the course.
Demonstration of a
high level of
interpretation and
critical analysis skills.
Evidence of a
high level of
achievement of
the learning
objectives of the
course
demonstrated in
such areas as
interpretation and
critical analysis,
logical argument,
use of
methodology and
communication
skills.
Evidence of an
exceptional level of
achievement of
learning objectives
across the entire
content of the
course
demonstrated in
such areas as
interpretation and
critical analysis,
logical argument,
creativity, originality,
use of methodology
and communication
skills.
Knowledge and
understanding
Limited understanding of required
concepts and knowledge
Key components of the assignment
are not addressed.
Knowledge or
understanding of the
field or discipline.
Resembles a recall
or summary of key
ideas.
Often
conflates/confuses
assertion of personal
opinion with
information
Thorough knowledge
or understanding of
the field or
discipline/s. Supports
personal opinion and
information
substantiated by
evidence from the
research/course
materials.
Demonstrates a
capacity to explain
Highly developed
understanding of
the field or
discipline/s.
Discriminates
between
assertion of
personal opinion
and information
substantiated by
robust evidence
from the
A sophisticated
understanding of
the field or
discipline/s.
Systematically and
critically
discriminates
between assertion
of personal opinion
and information
substantiated by
robust evidence

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30%
Points for this
criteria
0-2 substantiated by
evidence from the
research/course
materials.
3-4
and apply relevant
concepts.
5-6
research/course
materials and
extended
reading.
Well
demonstrated
capacity to
explain and apply
relevant
concepts.
7-8
from the
research/course
materials and
extended reading.
Mastery of concepts
and application to
new
situations/further
learning.
9-10
Critical reasoning,
presentation and
defence of an
argument and/or
position
30%
Points for this
criteria
Specific position (perspective or
argument) fails to take into account
the complexities of the issue(s) or
scope of the assignment.
Makes assertions that are not
justified.
Specific position
(perspective or
argument) begins to
take into account the
issue(s) or scope of
the assignment.
Justifies any
conclusions reached
with arguments not
merely assertion.
4 -7
Specific position
(perspective or
argument) takes into
account the
complexities of the
issue(s) or scope of
the assignment.
Others’ points of
view are
acknowledged.
Justifies any
conclusions reached
with well-formed
arguments not
merely assertion.
8-11
Specific position
(perspective or
argument) is
expertly
presented and
accurately takes
into account the
complexities of
the issue(s) and
scope of the
assignment.
Justifies any
conclusions
reached with
well-developed
arguments.
12-16
Specific position
(perspective or
argument) is
presented expertly,
authoritatively and
imaginatively,
accurately taking
into account the
complexities of the
issue(s) and scope
of the assignment.
Limits of position
are acknowledged.
Justifies any
conclusions
reached with
sophisticated
arguments.
9-1017-20

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0-0-3
Formation of
recommendations
based on the
identification of the
issues and the
application of case
law principles and
relevant legislation
identified in the
research process.
20%
Points for this
criteria
Difficulty in formulating own opinion
and a lack of recognition of the
various issues. A lack of application
of the relevant case law and/or
relevant legislation
0-3
Difficulty in justifying
own opinion. Some
recognition and
discussion of the
various issues.
Some application of
the relevant case law
and/or relevant
legislation
4 – 6
Own opinion is partly
justified with
reference to case law
and/or relevant
legislation.
Recognition and
discussion of the
various issues
identified in the
question Application
of the relevant case
law and/or relevant
legislation to these
issues
7-10
Own opinion is
justified with
reference to case
law and/or
relevant
legislation.
Recognition and
discussion of the
various issues
identified in the
question plus
others identified
by the student
Application of the
relevant case law
and/or relevant
legislation to
these issues
11- 15
Sophisticated
arguments
supporting own
opinion is justified
with reference to
case law and/or
relevant legislation.
Recognition and
discussion of the
various issues
identified in the
question plus others
identified by the
student and
problems identified
Application of the
relevant case law
and/or relevant
legislation to these
issues
15-20
Use of academic
and discipline
conventions and
sources of evidence
Poorly written with errors in spelling,
grammar.
Demonstrates inconsistent use of
good quality, credible and relevant
research sources to support and
develop ideas.
Is written according
to academic genre
(e.g. with
introduction,
conclusion or
summary) and has
accurate spelling,
Is well-written and
adheres to the
academic genre (e.g.
with introduction,
conclusion or
summary).
Is very well
written and
adheres to the
academic genre.
Consistently
demonstrates
Expertly written and
adheres to the
academic genre.
Demonstrates
expert use of high
quality, credible and

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10%
Points for this
criteria
There are mistakes in using the
APA style.
0-2
grammar, sentence
and paragraph
construction.
Demonstrates
consistent use of
credible and relevant
research sources to
support and develop
ideas, but these are
not always explicit or
well developed.
There are no
mistakes in using the
APA style.
3-4
Demonstrates
consistent use of
high quality, credible
and relevant
research sources to
support and develop
ideas.
There are no
mistakes in using the
APA style.
5-6
expert use of
good quality,
credible and
relevant research
sources to
support and
develop
appropriate
arguments and
statements.
Shows evidence
of reading
beyond the key
reading
There are no
mistakes in using
the APA style.
7-8
relevant research
sources to support
and develop
arguments and
position statements.
Shows extensive
evidence of reading
beyond the key
reading
There are no
mistakes in using
the APA Style.
9-10
Effective
communication
10%
The reader has difficulty following
the points being made, lack of
logical/clear
Structure, poor flow of ideas,
argument lacks supporting evidence
0-2
The arguments and
supporting evidence
are not always
presented in clear
and logical manner.
Spelling errors and
sentence structure
makes meaning
unclear
Information,
arguments and
evidence are well
presented, relevant
and show a clear flow
of ideas with logical
development
The information,
arguments and
evidence are very
well presented,
with clear logical
development of
ideas which
answer the issue
as set, with some
consideration of
related or flow
issues
Excellent
presentation with
clear and logical
arguments
supported by
relevant and varied
evidence. The
student answers the
issue and considers
in detail some
related or flow
issues with possible
ramifications.

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Points for this
criteria
3-4 5-6
Point range
7-8 9-10

 

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