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SUBJECT CODE AND TITLE: LAW 6001 TAXATION LAW

ASSESSMENT: CASE STUDY: TAX PLANNING

INDIVIDUAL/GROUP: GROUP

Question No.

Part A: Case 1- Married Young Couple

1. Regarding Share Investment

a) Not to sell shares at all

Tax Return for 30/6/2019 Tax Return For 30/6/2020

Matt Marinda Matt Marinda

Salary 150000 10000 Salary 150000 10000

Fully Franked Div. 14000 14000 Fully Franked Div. 14000 14000

Add Franking Credit 0 0 Add Franking Credit 0 0

Taxable Income 164000 24000 Taxable Income 164000 24000

Tax on TI Tax on TI

Medicare Levy Medicare Levy

Surcharge Surcharge

Less Tax offsets Less Tax offsets

Net Tax payable (Ref) 60680 4560 Net Tax payable (Ref) 60680 4560

Matt and Marinda Total Tax payable and Refundable 130480

The above said given by the calculation is for income tax liability of Matt and Marinda. If the
Matt and Marinda has not sale the shares then his profit and loss accounts are as under and they
are need to pay tax according to this calculation. So, I will recommend to them for not sale to
share in the June month because financial years will be changed Tax payment of the government
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department shall be deferred and also they will take additional profit. The dividend amount will
be distributed as per calculation given above to the both party.

b) Share Sales during 2019, required them during 2019

Tax Return for 30/6/2019 Tax Return For 30/6/2020

Matt Marinda Matt Marinda

Salary 150000 10000 Salary 150000 10000

Fully Franked Div. 14000 14000 Fully Franked Div. 0 0

Add Franking Credit 0 0 Add Franking Credit 0 0

Add net capital gains 5000 5000 0 0

Taxable Income 169000 29000 Taxable Income 150000 10000

Tax on TI Tax on TI

Medicare Levy Medicare Levy

Surcharge Surcharge

Less Tax offsets Less Tax offsets

Net Tax payable (Ref) 62530 5510 Net Tax payable (Ref) 55500 0

Matt and Marinda Total Tax payable and Refundable 123540

Matt and Marinda sell the share then the above said amount will be payment under the income
tax department. If the Matt and Marinda has sale the shares then his profit and loss accounts are
as under and they are need to pay tax according to this calculation. The profit will be distributed
to both party. After that both are need pay the tax. The mirinda tax is very less and Matt tax
amount is higher than Mirinda. The next financial year Mirindia taxable amount is exempt
because they are under the income tax exempt category. In view of this no need to pay tax in the
next financial year. The dividend amount is also not come under the income category. The total
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tax is payable in the account of mat is 62530 and next year 55500 and Mirinda total tax amount
payable for the both financial year is 5510. The both person including tax amount payable is
123540.

c) Sell the share during 2020 required them on 1/7/2019

Tax Return for 30/6/2019 Tax Return For 30/6/2020

Matt Marinda Matt Marinda

Salary 150000 10000 Salary 150000 10000

Fully Franked Div. 14000 14000 Fully Franked Div. 14000 14000

Add Franking Credit 0 0 Add Franking Credit 0 0

Net capital Gains 5500 5500

Taxable Income 164000 24000 Taxable Income 169500 29500

Tax on TI Tax on TI

Medicare Levy Medicare Levy

Surcharge Surcharge

Less Tax offsets Less Tax offsets

Net Tax payable (Ref) 60680 4560 Net Tax payable (Ref) 62715 5605

Matt and Marinda Total Tax payable and Refundable 133560

Matt and Marinda sell the share in this financial year then the above said amount will be
payment under the income tax department. If the Matt and Marinda has sale the shares then his
profit and loss accounts are as under and they are need to pay tax according to this calculation.
The profit will be distributed to both parties. After that both are need pay the tax. The mirinda
tax is very less and Matt tax amount is higher than Mirinda. The next financial year Mirindia
taxable amount is exempt because they are under the income tax exempt category. In view of this
no need to pay tax in the next financial year. The dividend amount is also not come under the
income category. The total tax is payable in the account of mat is 60680 and next year 62715 and
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Mirinda total tax amount payable is 4560 and the next financial year is 5605. The both person
including tax amount payable is 133560.

Question No.

2. Regarding Rental Property

a.

1/7/2019- 30/6/2022 1 single ST 32 Pam Ave

Rental Income 96000 96000

Rental Deduction 16500 16500

Net Rental gain/loss 79500 79500

The above said amount will come as a rental income for the above said category purchase the
flats by the matt and marinda. The rental amount will be always good because price of the
property be hike and also owner of the property get rent. After the deduction and expenses arise
on the property owner which has been gain of Rs. 79500 profit amounts under the rental of the
property.

b.

During July 2022 capital gain 1 single ST 32 Pam Ave

Proceeds 70000 70000

Less cost base 0 0

Net capital gain 70000 70000

The above said amount gain as capital gain if the property has been selling during this period.
The estimated gain amount proceeds under the profit and loss account.

c.
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Taxable Income 1 single ST 32 Pam Ave

2019/20 Rental 32000 32000

2020/21 Rental 32000 32000

2021/22 Rental 32000 32000

2022/23 NCG 96000 96000

The total income come from the rental value is above mention. The income tax will pay paid as
under. Matt total taxable value will be increase from the total assessable value. Rental value and
other income will be including in the all value then deduction deducted then tax will be payable.

Question No.

3. Regarding Business Structure

a. The family Trust is suitable in all business. In this case Tax will be minimize to the client.

b. Sole Trader

Matt Miranda

TI 150000 10000

Total Tax Payable 55500 0

Matt has to continue as a sole trader then he need to pay income tax on total amount receivable
under the income tax is not any amount will be deducted as expenses. Partnership Company
should be paper work should be extra and all in condition will be followed in the limited
company but it will be cheaper from sole trader because the expenses shall be deducted. So every
individual have duty to pay the tax and upto limited amount every citizen have right to exempt
from pay the tax. Now we are come in to the point that if any individual running any business
then you need pay the tax on the part of profit income shown in the end of the financial year. If
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the mat is earning from sole trader of 150000 then they need to pay 55500 tax under the income
tax act.

Partnership

ABC D80 150000

Matt Miranda

Income from Partnership 75000 75000

Wages 10000

Tax Payable 24375 21125

If the Matt has form the partnership firm then this is the best option to all other option.
Partnership Company should be paper work should be extra and all in condition will be followed
in the limited company. A partnership is not a taxable entity, but it must file a tax return at the
end of each income tax financial year. The partners are paid the taxed on their share of his profit
taken from the partnership firm and first is deducted the tax from partners and pay the tax to
government. If the loses arised in the partnership first then also it’s forwarded to partner and
then can take the benefit of this loses in the next financial year. It is submitted that some
deductions are not available to the partnership, but may be claimed by the partner of the
partnership firm. The partnership asset is owned by the partners not the firm in the proportion to
which the partners have agreed and forwarded. The all expenses will be booked in the head of
expenses and other expenses can be booked and profit and can adjusted by the client as per
required. So, this the good option from the sole trader. In view of this we advised to form the
partnership company.

Private Company

TI 150000
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Tax Payable 41250

If the Matt has form the registered company then this is the best option to all other than the
partnership firm. The Company should be paper work should be extra and all in condition will be
followed in the limited company. The all expenses will be booked in the head of expenses and
other expenses can be booked and profit and can adjusted by the client as per required. If the
companies are registered under the company act under the Australian Act then you need to
follow the instruction of the Australian company act. Generally, non-resident companies are
subject to Australian income tax on Australian-sourced income only. When you start a business
in Australia and you registered under the company act then you need to registered under the
Australia Business Number (ASN) and a tax file number (TFN). After their registration you
must be registration under the goods and services tax (GST) and other taxes. So, this the good
option from the partnership firm. In view of this we advised to form the company. This is the
best option from the partnership firm.

Family Trust

Trust Net Income 150000

Any beneficiary 10

How to distribute As need

Tax Payable 28500

If the Matt has form the family trust then this is the best option to all other option. The family
Trust should be paper work should be extra and all in condition will be followed in the limited
company. The all expenses will be booked in the head of expenses and other expenses can be
booked and profit and can adjusted by the client as per required. So, this the good option from
the limited company also. In view of this we advised to form the family trust and this option is
the best. Very small amount of tax need to pay in case of form the family trust in view of this is
the best option. The family trust generally created by the only family member and these benefits
for all family members. Trust is the fundamental element in the planning of the business. It must
be a goal and strategy for the registration of the trust. Any individuals and family members can
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be a part of the trust. The share holder of the nominee has been part of the trusty. Many persons
have created the trust for money investment. The net income of a trust is its assessable income
for the year less allowable deductions worked out on the assumption that the trustee is a resident.
A beneficiary of the trust is presently entitled to trust income for an income year where they
have, by the end of that financial year, a present or immediate right to demand payment from the
trustee. The entitlement will depend on the trust deed and any discretion that the trustee has
under the deed to allocate income between beneficiaries.

For creation of family trust you need to one path so that you do for public work. The family trust
have too much discounted in taxation part also. The family trust can manage the fund as per
requirement of the society. The family trust has other many potential benefit. The terms and
condition should have been mentioned at the time of creation of the trust. Trusty is the
responsible for the trust and its assets.

Question No.

4. Regarding Trust and asset distribution

a. The Trusts complete controlled have been at the time of form of Trust in the hand of matt’s
father Robert. If the marriage of the Matt and Miranda has been breakdown any reason then trust
is liable to pay tax in this situation. Trust is the fundamental element in the planning of the
business. It must be a goal and strategy for the registration of the trust. Any individuals and
family members can be a part of the trust. The share holder of the nominee has been part of the
trusty. Many persons have created the trust for money investment. The net income of a trust is its
assessable income for the year less allowable deductions worked out on the assumption that the
trustee is a resident. A beneficiary of the trust is presently entitled to trust income for an income
year where they have, by the end of that financial year, a present or immediate right to demand
payment from the trustee. The entitlement will depend on the trust deed and any discretion that
the trustee has under the deed to allocate income between beneficiaries. Trust is not a separate
legal entity. Generally, the net income of a trust is taxed in the hands of the beneficiaries based
on their share of the trust's income (that is, the share they are 'presently entitled' to) regardless of
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when or whether the income is actually paid to them. The all profit has been distributed with the
trustee. This reference is related to trustee.

b. The second issue is assets distribution between parties. In this situation Mr. Robert has
complete power to how distribute the asset of the trust. A beneficiary of the trust is presently
entitled to trust income for an income year where they have, by the end of that financial year, a
present or immediate right to demand payment from the trustee. Any individuals and family
members can be a part of the trust. The share holder of the nominee has been part of the trusty.
Many persons have created the trust for money investment. The net income of a trust is its
assessable income for the year less allowable deductions worked out on the assumption that the
trustee is a resident. The entitlement will depend on the trust deed and any discretion that the
trustee has under the deed to allocate income between beneficiaries. It is completely depend
upon the Robert. The trust fund is the whole country assets and its care about the all citizen of
the country. The very individual have right to protect the trust assets. We can say the trust is an
umbrella. Trust is a private legal management who has manages the asset of the trust. For
example if we have power to contribute the assets then we have right to how distribute the asset
of the trust.

PART B: CASE 2 Taxpayers at retirement age

Question No.

1. Regarding Trex’s Termination payment

Total Taxable Income

Tax on TI at marginal Tax 470000

Overtaxed 470000

Less some AI marginal 26000

Less some AI * 30% 6500

Less some AI * 15% 2800

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ETP Tax Offset 11700

The total taxable income is the Trex for determining the pay for tax is 11700 which tax has been
paid by the assesse.

2. Regarding Trex’s termination payment and superannuation payment

Particulars 60 and above Preservation

Tax Free Component 0% 19%

Element untaxed 17% 45%

Element taxed 15% 45%

No Tax will be applicable if you withdrawal the tax free component before this time limit. The
super withdrawal option you choose may affect the amount of tax you pay and the amount of
money you have for your retirement. Withdrawing money from super as a lump sum can also
affect your transfer balance account. If you have withdraw the any amount of element of taxed
fund and untaxed fund before the retirement you need to pay the tax.

3. Regarding Belinda’s Business:

 Trex will eligible for BSE in regards to all assets purchase for his business activity. If you
are an small business entity then you are eligible for GST concession for individual tax
payers. If your turnover of the business is less than two billion dollor then you are
concession in various sectors like GST. This turnover is applicable if you’re previous
year less than this amount. You have to also concession in capital gain. The small
business entity can charge the GST on transaction basis. The other consession is also
available for this category in amount borrowed for the business. The small business can
proceed the form for capital business also.
 The concession for trading stock is not eligible. The special category is available for BSE
for the trading of stock. The trading stock rule has been simplified for the small business
entity only. Some relevant limit the small business entity can withdraw the amount and
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pool the asset from the company. The CGT concession will be available to small business
also. This is special discount for the small business entity. This is the additional gain
concession for small business entity. But any concession is not available for them.

 Yes, small business entities can also relief for the asset pool facility but there is a
minimum limit that you cannot withdraw the amount from minimum limit. The one
option is also available for small business entity that simplifier depreciation for small
businesses. Some relevant limit the small business entity an withdraw the amount and
pool the asset from the company. In the first year maximum amount of 15% can be
withdraw by the assesse. And after the first year company can withdraw any time 30% of
the total amount of the assets value.

 The capital gain concession will be available to the small business entity. The one option
is also available for small business entity that simplifier depreciation for small
businesses. Some relevant limit the small business entity can withdraw the amount and
pool the asset from the company. The CGT concession will be available to small business
also. This is special discount for the small business entity. This is the additional gain
concession for small business entity. If you small business have been runs fifteen years
and your age is over fifty five years then you need to retirement from this business. Apart
from this various discount is available for the small business entity.

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end). Appellate Practice

(Hallinan, C., & Heenan, T. 2013. pp- 57-65). Other Responsibility: Theory of

research(7th end).. Wiley

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