Required a plagiarism report for this assignment.Answers must be as instructed below.
Length: 3,500 words (Excluding calculations and footnotes/endnotes)
This assignment consists of three (3) case studies. You must complete all the case studies and all parts of each case study. Support all your discussion and analysis with references to any relevant authority.
Case Study One
Part A
Elizabeth was born in 1982 and qualified as an accountant in 2004. Elizabeth is married to Tom and they have three children who attend school full-time in Australia. The family has always lived in Australia. On 1 July 2011 Elizabeth travelled to South America to take up an accounting job with an American company. The contract was for two years with an opportunity to extend for a further year. Tom and her children stay in Australia while she is overseas. Elizabeth comes back to Australia every three months for two weeks holiday each time (8 weeks in total) during the year ended 30 June 2012. Elizabeth had her salary while overseas paid into her Swiss bank account. While in South America she stays in accommodation provided by her employer who has mining sites in four different locations.
Required:
Based on this information provide advice to Elizabeth as to whether she is a resident of Australia for the year ended 30 June 2012. Support your answer with reference to appropriate authority.
Part B
Key Ltd (Key) was incorporated in South Africa on 12 April 2003 and its shareholders are as follows:
- Jack an Australian resident holds 60% of the shares and voting power;
- Jill a resident of the USA holds 20% of the shares and voting power; and
- Jenny a resident of South Africa holds 20% of the shares and voting power.
Key's primary income earning activity is operating a manufacturing business in Melbourne. The general manager of the company lives in South Africa and makes the day to day decisions in relation to the company and communicates his instructions to the Australian manager each week via email. Key's board meetings including the annual general meeting are held in South Africa.
Required:
Based on this information provide advice to Key as to whether it is a resident of Australia for tax purposes and whether the income earned in Australia and outside of Australia is taxable in Australia. Support your answer with reference to appropriate authority.
Part C
Collins Pty Ltd a resident company carries on a transport business where it transports freight from Brisbane to Toowoomba each day. Collins has over 500 contracted customers that it provides transport and delivery services. During the year ended 30 June 2012 Collins had the following transactions:
- One of Collins' customers cancelled its transport contract on 4th May 2012 and paid $1,000 to Collins to compensate Collins for the loss of income for the remaining term of the contract.
- On 14th April 2012 Collins received a payment of $40,000 from Louis Pty Ltd (another transport company) as a result of Collins agreeing not to expand its operations for five years beyond its current business between Brisbane and Toowoomba.
- Collins had paid truck lease payments of $35,000 during the year ended 30 June 2011 and claimed tax deductions for those payments. On 13th October 2011 Collins was reimbursed $12,000 because it had overpaid the expense in the 2011 year.
Required:
Based on this information what amount should Collins bring to account as assessable income in the year ended 30 June 2012 (do not include capital gains)? Support your answer with reference to appropriate authority.
Part D
Patrick, a resident, carries on a wholesale business selling building materials to the construction industry. He had the following three transactions which are relevant to determining his assessable income in the year ended 30 June 2012:
- Patrick received a lease incentive of $20,000 to encourage him to take a new lease on a commercial business premises in Toowoomba so that he could re-locate his business. Patrick received the lease incentive on 12 April 2012 and moved to the new premises on 4 June 2012.
- Patrick ordered some building materials for one of his customers from an overseas supplier. Patrick received a deposit of $4,000 from the customer on 3 May 2012. If the building materials do not arrive from overseas Patrick must refund the deposit to his customer. At 30 June 2012 the building materials have not arrived in Australia.
- Patrick valued his closing stock at 30 June 2011 at cost of $56,000 for income tax purposes and on 30 June 2012 he valued his closing stock at replacement price of $68,000.
Required:
Based on these three transactions what is Patrick's assessable income for the year ended 30 June 2012? Support your answer with reference to appropriate authority.
Part E
Jeremy, a resident, works for Walker Pty Ltd as a lawyer and had the following transactions in the year ended 30 June 2012:
- Walker Pty Ltd provided Jeremy with the use of a motor car for his private use for the whole of the financial year ended 30 June 2012. The market value of the benefit was $9,000 but only Jeremy can use the car.
- On 27th July 2012 Walker Pty Ltd paid Jeremy a bonus of $3,500 for the year ended 30 June 2012.
- On the week-ends Jeremy works for a landscape gardener where he does a lot of physical activity and received $20,000 for this work for the year ended 30 June 2012. Jeremy undertakes this work to keep fit and earn some money to enable him to attend a major overseas music concert each year.
Required:
Based on this information what amount should Jeremy include in his assessable income for the year ended 30 June 2012? Support your answer with reference to appropriate authority.