Practical and Written Assessment
LAWS20060 Taxation Law of Australia
Term 2 2016
Due date: Tuesday 6 September 2016 11:45 PM AEST

Weighting: 40% – This assignment is worth 40 marks in total.
Length: 2 000 – 3 000 words. Marks awarded to each question are indicative of the amount of information required to comprehensively answer the question.

While the assignment is largely based on material covered, you are free to research and seek advice as widely as you find necessary – there are no limitations as to sources. However, sources should be appropriately referenced.
The assignment is to be submitted online in Moodle. Submission must consist of one document only. This document must be in Word format only ie .doc or .docx. Required file name: student surname_student number_LAWS20060_ASSESS

The method of referencing to be used in this assignment is the American Psychological Association (APA) referencing method. Additional information regarding this method is available through the library and the Academic Learning Centre. When making a reference, cite the original source or authority in preference to a secondary source such as the textbook, especially when you are discussing various sections of legislation. This means you should make reference to legislation, cases and Tax Rulings as a priority to back up any arguments that you make in your assignment.

QUESTION 1 (20 marks)

Juliette is a famous English dancer who is contracted by a private theatre management company based in the United States of America to come out to Australia to choreograph the dancing routines for a new stage musical based on the Harry Potter books. The contract is for 2 years from 15 March 2015 through to 15 March 2017. The contract is signed in England with payment of AUD$70,000 going into a Swiss bank account on 15 July 2015. Further payments of AUD$70,000 will go into the bank account every 6 months until the contract is complete.

Juliette flies into Sydney on 1 February 2015 with the intention of spending some time looking around the country while she is waiting for her job to begin. At this time Juliette gives up the lease on her flat in London and sells some of her furniture. Other items of furniture consist of valuable antique pieces, which she keeps in storage to use on her return. On arrival in Australia Juliette embarks on a bus trip around the country, which is planned to last for 2 months. However, on 28 February 2015 Juliette finds out her mother is seriously ill and she is required to fly back to England to see her in hospital. Juliette stays at her mother’s house until her mother is well enough to look after herself and returns to Australia to fulfill her contract on 1 May 2015.

As the contract will be fulfilled in Sydney Juliette leases a flat in Sydney and purchases furniture to go with it. As the year passes Juliette finds that she is deeply in love with the lead male dancer, Romeo, and they talk about getting married. As Romeo grew up in Sydney and wants to stay there Juliette buys a house for them to live in together in August 2015 and they marry on 1 September 2015. Juliette can’t believe her luck as she has always thought she might like to live in Australia permanently.

Sadly, her good luck came to an end when she received a call that her mother had once again become ill and she had to return to England to look after her on 15 October 2015. With a heavy heart Juliette said goodbye to Romeo and returned to England hoping that her mother’s condition would pick up quickly so that she could return to her husband and the country she had grown to love. However, Juliette’s mother required 24 hour care and insisted that Juliette was the one who looked after her, so Juliette had to stay on in England to fulfill her mother’s wishes. To make the arrangement easier for Juliette her mother paid her AUD$1,000 per month to cover her mobile phone bills to Romeo, even though she lived in her mother’s house without paying rent. Throughout this time Juliette still received her AUD$70,000 every 6 months as she was able to transmit her choreography notes to Romeo who then passed them onto the assistant choreographer and the show went on without her.

Unfortunately, Juliette’s mother passed away on 10 April 2016 and Juliette returned to Australia on 15 April 2016 to seek comfort in the arms of husband Romeo and distract her mind with work.

REQUIRED (Q1):

Advise Juliette as to whether she will be a resident of Australia for income tax purposes for the 2014/15 income year AND the 2015/16 income year. Please address each income year separately. Please also address each test of residency.
QUESTION 2 (20 marks)

George had a relative who had lived in Sydney but who died in October 1995. On the death of the relative George inherited his Sydney house.

On inheriting the house George decided to let the property, and appointed ‘Honest Chris’ Real Estate’ managed by local real estate baron Christopher Skate, as property manager. The property had been rented from the time it was inherited.

Repairs were carried out in December 2015, including:

– replacing the damaged fibro roof with longer lasting colorbond $15,000
– general repairs and maintenance $6,000
– new furniture and fittings
– repainting the front fence which consists of painted wooden pickets
– fixing the broken front door which was damaged by vandals $1,200
$2,500

$1,000
The new items were all purchased on 1 December 2015.

George uses the prime cost method for decline in value for the rental property. The cost and effective lives of the assets are:
Cost Effective life
Stove $900 12
Hot water service $2,000 12
Carpets $3,500 10
Furniture and fittings $5,000 13 1/3

Rent received for the current income year totals $13,900. Management commission paid to the agent amounts to 5% of this.

REQUIRED (Q2):

a) Prepare a statement setting out the taxable income that will arise from the rental property.
b) Prepare a discussion explaining each component of the rental property statement prepared in Q2a). This discussion should clearly explain the inclusion/exclusion of each element of the rental property statement above.

Assessment criteria
Word Limit
Do not exceed the word limit if you can possibly avoid doing so. You may find that you have written too much so it is probably worthwhile to edit your assignment so that it is more tightly structured. Some of the information you have included in the text may be better placed in footnotes.
Evaluation Criteria
These criteria are a general guide as to the standard expected at the various levels. Characteristics indicative of the respective levels of achievement in the assignment are as follows. It is not necessarily the case that all these criteria will be met at a particular standard as there may be a superior performance on one of the criteria and not so satisfactory performance on another.
High distinction standard
• The answer is very well written and clearly expressed
• There is a demonstrated appreciation and understanding of the issues involved
• The answer is well structured and logically organised
• Demonstrated mastery of referencing system
• There is evidence of a comprehensive analysis of the issues
• Conclusions are backed by well-reasoned arguments demonstrating a detailed insight and analysis of issues
• Comprehensive coverage of all relevant issues
• References are made to the appropriated legislation for particular issues
• Statutory provisions are analysed and interpreted correctly
• The legislation is applied to the particular fact situation in a competent manner
• Consideration is given to the operation of the common law
• There may be consideration of issues not raised in the tutorials and answer guides
Distinction standard
• The answer is well written and expressed
• The answer is structured and logical
• The issues have been reasonably well identified and appreciated
• There is correct use of referencing
• Issues have been analysed
• Reference is made to all appropriate legislation, although the analysis and interpretation is not as detailed and reasoned as for the high distinction standard
• The effect of the common law is considered
• There is a comprehensive coverage of the issues
• Occasional errors of law and legal reasoning may still be present
Credit standard
• The answer is generally well written and expressed
• The answer is structured and sequential
• Referencing is satisfactory
• Issues are identified and addressed
• There has been an attempt to analyse some of the issues
• The coverage of issues is reasonably comprehensive often with a good treatment and analysis of particular points
• Errors of law and incorrect reasoning may sometimes be present
• Statutory interpretation may require improvement
• Depth of treatment is often lacking in some of the issues
• Pass standard
• The answer is able to be followed and understood
• The answer could perhaps be better organised and structured
• The referencing may need improvement
• Issues may need to be identified and addressed in more depth
• Analysis when present may be incorrect
• Some familiarity with the legislation and its application is demonstrated
• Sometimes the conclusions reached are simple
• There may be several errors of law
• There may be quantities of material of marginal relevance included in the answer
Fail standard
• The answer may be significantly short of the required length
• The written expression is poor and difficult to understand
• The answer is poorly organised
• There has been a failure to identify and address the issues in the question
• Referencing is generally inadequate
• There is a lack of familiarity with the legislation and its appropriate application
• The reasoning and application demonstrated is poor
• Frequently there is much irrelevant material