THE UNIVERSITY OF NE SOUTH WALES
Austral Australian ian School School of Business Scho School ol of Bu in Law an Taxation
LEGT2751 BUSINESS TAXATION SEMESTER FINAL EXAMINATION 1.
ll wed: wed: 10
3.
minutes
This examin examinatio atio paper has:
ge
40 TW
Questions
7.
All Q ue ue st st io io n a r o f Equal Value
8.
All answ answer er must must be Writ Writte te in Ink
MA
.,
be
ed
th cand candid idat at
SPEC SPECIA IA INSTRUCTIONS
10
ques questi tion on must must be answ answer ered ed in
sepa separa rate te book bookle le
11.
Answ Answer er must be clea clearl rl writ writte ten. n. Answ Answer er that cannot be read read will will
b e marked
12
Candidates ar perm permit itte te to brin brin electr electroni oni calc calcul ulat ator or room. UNSW approved
nt the exami examina nati tion on
13
Ther Ther ar no estr estric ic io on ma er al yo ca brin brin examinatio tio is an open book examina
the exam examin inat atio io
It
...Ip/e ...Ip/ease ase see o v e r
11111/111111/1//1//111/1/1/1/1111/1//1111//111// 1/1111/1//1111//111//1/111/1///// 1/111/1//////1/1 >014448742
rt purchase derelict fd on Januar Yl in $500,000 financ th purchase borrow $500,000 10 to Martin's purchase Big Bank Ltd. th ee arit rg to women' by rental of $1 00 pe week At th time rt purchase th ea th women's fu year He th il ng subjec to that Once Martin purchase th building he shouts "I have drea !" da th building will be af the Communit able to come and Its log will be gl be th worl
drea is that on Cafe", wher will be
Februal) vacate th ss June Y1.
rt applie to th ca counci fo permission to redevelo th building th women's refuge on month' notice On 14 February Y1 Th women's fu refuse to vacate and incurs $10,00 in legal t h w o e n' s om n'
redevelo the ui di g, borrow
Y1 Martin to
furthe $700,000 at 10
Big Bank Ltd.
Martin redevelops th building so th t, in external appearance, its making machine locate in th glob shaped total cost of th redevelopmen is centra ff machin an change to th rn appearance of th ff ak machin an nozzles to change to th xt rn appearance of th il in to be Y3. su cessfull opposing an applicatio Coffee. World world.
On
lobe of th on each
an th st
la th ff
th
years.
lh
November Y3 es epicts cu
$50,00 ompeti or Worl
Required:
in
Big Bank Ltd ar
deductible under s8-1
he of the
40
5.
Th
redevelopmen of th ternal appearance of the uildin and/or th st coffee making machin and pes. si 40 capital is abl to clai allowances Calculat th 40 ca ital allowances that be availabl to th prim cost method in Y1 bl is 40 allowances of whethe he ca cl othe deductions in sp of an of the referred to in bo calculat the deductions that he ma claim. if et th registered design are deductibl under s8-1
..
please
see
over fo Question
QUESTION TW
(20 Marks)
Trusty Unit Trus is an Australian resident trus estate. It conducts business of sellin teapots. al of its openin stoc 2008 wa $1,000,000 Its purchase throug he 00 30 while its sales (excluding expenses associated th have been $660,000 It sells its at of each item th 2009 $110,000 represents invoices issued in 1h bee received at 28 Jun 2009. ru Unit Tr st advise its customers that it will 5% discount if they pa outstandin theinvoic€. In practice cust mers only invoices within 30 ay within 30 cc rr e/ th is accounts sect of to th isco nt Th only occasion in as when discount prompt paymen wa were cust mers wh ha th initiall no receive the discount made complaints to th Tr st Unit Tr st accounts section. 2009 to oi commitments/ an increase in income ta be announce 2009 ca to wha adjustment make to th of its tradin stock as 00 ta purposes in th year ending its income is recognised 30
June 2009.
In t h
e n i n 30 its employees. In accrue servic leav none tak long servic leav in the year ending 30 Jun 2009. th la
its employee were entitled
to
its tradin stoc fo that th tmen th al at on 30 June 2009 nd ke its ne rofi fo trus an financia accounting purposes to its unit holders. Th distribution is made on 30 June th
Trusty Unit Trust. re re 10 in Trusty Unit rust Each unit holder owns on un an is equally entitled to is ribution the ru income of th holder is ne of the th th Discretionary Trust is Clin ·U Th object of the trustee' discretion ar (a resident rl adul resident whose income othe source is 100/00 an adul resident whose income othe source is at th inco th C1ine Discretionar the year ending 30 June 2009 is the stribu on that receives the Tr st on 30 Jun 2009 Cline Pty Ltd tr st want to make of th income of th es at on 30 June 2009 in manner whic th th an th ject th trustee' discretion the truste wha istr bu ions should make to achiev re
..
please
see
over for Question
(Cont'd)
TW Anothe unit in Trusty Unit Trus is held by Tracy an wh conduc cleaning bu in ss to ethe tn th ag me ar to be divided equall but Trac is tl to th income th whil is entitled artnership agreemen ro that cy will th ne income st is 0. id to th by $200 mont throughout th
pa ne
ending 30
2009
Doug
qualified accountan
wh
has
been
un 2009 for $5000 in respec of accounting ervice that he provided to th from he at it the provided during th year ending 30 un 200 ar $100,000 In th year ending 30 2009 th ar ne hi $10,00 on cleaning products that it used in the business Tracyand othe ncom ending 30 2009 Calculat
on
and Doug's assessab
ou show all legislativ provisions and principle exclusive basis. Your
income
lh
the year ending 30 June 2009.
ca ul on an taxatio aw All
to
.. .1 pl as
made
GST
ove fo Question
QUESTION THREE th income
purposes
akes
Marks) 2008-200 Alph
rofi of $3,000,000 made
t o $1,000,000 on
th
sale
as follows:
pre-CG asse Ltd
ta purposes franked to 50 in Ne
Ltd, an Australian resident private compan for ta
st
resident public compan
Pty Ltd (Alpha Pty Ltd's 100% subsidiary resident Zealand) which is non assessable exempt income Alph Pty unde ITAA
1936s23AJ
Calculate Alph Pty income ta li ilit in th that it derived in th of 2008-2009 ss me that lp Pty Ltd had no allowabl deductions othe than expenses which have bee take nt accoun in determining trading profit During tax.
th
year endin
30
June
2009
Alpha Pty Ltd
of $60,00
of
if 1/7/2008 th balance Alph Pty Ltd' frankin account at all, th paymen of th instal en of th receip th dividends a n t h sale th pre asse ff ct lpha Pty account. that no othe events occur whic affect Alph Pty franking account, calculate the balance in Alph Lt 's franking account as at 30 June 2009. On
Alpha Pty Ltd re of te th maximum th consequences franking credit tha Alph Pty Ltd ca at ch to omme it attaches th maximum franking credit to fo Alph Pty divi end. to thes consequences advise Alph Pty Ltd of th amount to which should fran th dividend. On
2009
Tw Alph Pty shareholders are Rebecca, residen natura person whose marginal tax rate is 30%, an non-resi en ra pers n. becc an shareholding in Alpha Pty Ltd. Assuming that th dividend from Alph Pty Ltd is franke to th extent that recommend, advise Rebecc an ax of th paymen th th dividend fr Alph Ply Ltd them
END OF PAPER
