Australian Taxation Law Disposal of Such Property

Question: Describe about the Australian Taxation Law for Disposal of Such Property. Answer: 1: Three types of payments are reflected by the given study, which needs to be considered as an income from the personal exertion. The main reason attributing to this was that it was privately written and the concerned rights, photographs and script were disposed of after it has been complied with the law. The situation would have different if Hilary would have written story for her satisfaction and would have made the decision to sell of the later (Besley Persson, 2013). The income generated from private exertion comprises of the remuneration, ages, commission, grants, and earnings and has to be understood as the same and this mostly relates to any sort of services delivered and to the employees. The taxpayer accounts for the revenue generated and this is accounted either alone or in partnership. The amount is considered in to the respective accounts which is the assessable income of the concerned individual paying the tax as notified under section 393-10 of the Income tax assessme nt act 1997. Therefore, such types of income which forms a part of the employment of profit and is generated from any sort of property and which is held by an individual who is paying any sort of profits or tax or revenue which has been yielded from the disposal of such property (Bird Zolt, 2014). If the Hilary would be the owner of the copyright of her writing and the contracts would have been in terms of the daily terror, which is created on the Hilarys parameters. If Hilary would be selling off the manuscript for $ 10000, it would not be regarded as the reward for service. In the Brent v FCT (1971) 125 CLR 418 case, it was stated that the payment accounting from the sale of any or disposal of the manuscript would not be considered as sale and would be treated as the ordinary income (Christie, 2015). If it is understood that Hilary is running the business of selling the articles but there is not any possibility of the happening of such things as Hilary has never penned down the story any time soon. However, if the above fact is considered, it can be concluded that the income of Hilary cannot be regarded as the ordinary income. Therefore, the things should be noted that the fact could not be accounted for the assessment under S-15-2 of Income Tax Assessment Act 1997. The reason behind this is that it would not be considered as any form of reward, however, it could be understood that it is a payment made for transferring of the title of copyrights of the articles, which she wrote, and the rights of Daily terror would remain with her. In the event of happening of such situation, the scenario can be considered similar with the Brent, the payment, which is received, would be considered as the ordinary income, and this would be the reward for service (Davison et al., 2016). Therefore, the scenario presented would not form a part of assessment under Section 15-2 of the Income Tax Assessment Act 1997. The reason attributed to this is that gains arising from this is regarded as the ordinary income and is not included in the ion 15-2 (3) of the Income Tax Assessment Act 1997. 2: The payment of $ 50000 is considered as the interest income and this is denoted at the very opening of the case study. The case of Riches v Westminster Bank Ltd (1947) AC 390 at 400 and under this case, the interest is considered as the payment and this is payable as the payment has not been made by the creditors for the money which is falling de under the prescribed date. The surplus payment of $ 10000 by the son to his mother under the presented scenario, is regarded as the payment for the loan amount taken by mother from his son. However, the amount of sum lent to the son by the parents for the time frame of five years for the purpose of constructions, the parent did not make use of such amount of sum (Hatfield, 2015). Therefore, as stated under the Section 6 subsection (5) of the Income Tax Assessment Act 1997 in the form of interest income the amount of $ 40000 would form a part of the ordinary income. However, the necessary conclusion cannot be altered and would be denoted by the sum total of the amount paid after the lending period expiration (Tanzi, 2014). It was mentioned at the initial stage of the case study , that the interest payment were not required by the parents for the loan lent to their son, however extra amount of $ 10000 was paid by the son to his parents. The payment, which is extra, is equivalent to the rate of 5% and this rate at the yearly basis. This rate is accounted from the borrowing of $ 40000. This amount would be regarded as the ordinary income under the interest income head. It can be argued under Section 6 Subsection 5 that the ordinary income do not comprise of the surplus payment and it becomes mandatory to make a declaration that such incomes is separate and it do not forms a part of the amount of the loan provided (Hegemann et al., 2015). 3a: Purchase Price 90,000.00 Month Year of Purchase Sep-86 Sale Price 800,000.00 Month Year of Sale Aug-16 No of Years 29.9 Capital Gain 800,000.00 Tax with Indexation 160,000.00 Purchase Price 90000 Construction cost 60000 Total cost of land 150000 Disposal Proceeds 800000 Net Capital gains 650000 3b: Purchase Price 90,000.00 Month Year of Purchase Sep-86 Sale Price 200,000.00 Month Year of Sale Aug-16 No of Years 29.9 Capital Gain 200,000.00 Tax with Indexation 60,000.00 Purchase Price 90000 Construction cost 60000 Total cost of land 150000 Disposal Proceeds 200000 Net Capital gains 50000 It can be clearly depicted from the case study if Scott transfers the rights of ownership to his daughter. The valuation of such sales is based on the market value rather than on the amount transferred. 3c: Purchase Price 90,000.00 Month Year of Purchase (eg. mm/yyyy) Sep-1986 Sale Price 800,000.00 Month Year of Sale (eg. mm/yyyy) Aug-2016 No of Years 29.9 Capital Gain 800,000.00 Tax with Indexation 160,000.00 Purchase Price 90000 Construction cost 60000 Total cost of land 150000 Disposal Proceeds 320000 Net Capital gains 170000 Gross capital gains 260000 Less: Exemption 130000 Net Capital gains 130000 Assessable as individual 130000 Assessable as company 222090.2613 If the income is assessed on the basis of the parameters of discounted method, this would enable the owner to seek the advantage of tax exemptions. This is noteworthy to denote under the presented case study. However, if the owner were not regarded as an individual rather he is regarded as the company, then the assessable of the company would be considered under the capital gains. 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