1. a. To what extent is Mary assessable on the above transactions? Ensure you state the specific legislation, tax rulings and case law to support your answer.
2. b. Calculate her assessable income, her taxable income and tax payable for the 2015/2016 tax year. Ensure you include the Medicare Levy and any tax offsets Mary may be entitled to.

Taxation (ACC3TAX) - Sem 2 of 2016 Individual Assignment Assessment Title Individual Assignment Task Description Students shall be required to analyse, interpret and apply the correct tax regulations to a given problem and this will involve tax calculations. A word limit of 500 words will apply. In the first instance please seek clarification from your lecturer/tutor regarding the requirements of your assignment. Further help is available at: http://www.latrobe.edu.au/students/learning/drop-in-learning-support Assessment Due Date Week 5 Sunday (28-Aug-2016) 11:45 PM AEST There are policies and procedures to guarantee fair, consistent and transparent treatment of late submission of assessment tasks. Where a nonexamination item of assessment including essays or assignments is not submitted by the due date and time, a penalty will be levied as follows: The standard penalty for late submission of assessment tasks is 5% of the marks for that task for each delay in submission of a day or partial day up to a maximum of five (5) working days after the due date. Assessment tasks will not be accepted after the earlier of the following occurrences: The fifth (5th) working da y a fte r the due da te ; or Fe e dba ck on the a s s e s s me nt ta s k ha s be e n re turne d to a ny s tude nt by the Teaching Team member. Post Date to Students Week 8 Sunday (18-Sep-2016) 11:45 PM AEST Assignments that are submitted on time will be posted on LMS by the above date. Assignments which are submitted late may be posted after this time. Weighting 20% Submission Online. The assignment must be submitted in one (1) document only. This can be in Word or PDF format. All assignments must be clearly identified with the student name and student number. Page 1 of 4 ACC3TAX /Taxation Maria Zito La Trobe University Assignment Format Format your assignment as specified below: Font: Tim e s Ne w Rom a n, s ize 12 Line s pa cing: 1.5 between lines. Ma rgins (le ft a nd right): 3.5cm or 1.5 inche s (this a llows s pa ce for comments to be made by the assessor). P rinting: S ize A4 white pa pe r, printe d in one s ide only Num be ring: pa ge s m us t be num be re d cons e cutive ly. Word count: a s s ignme nts mus t follow the s pe cifie d word le ngth, a lthough a tolerance of 10% is allowed without penalty. 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 the footnotes. Reference System The system of referencing to be used in this assignment is the Australian Guide to Legal Citation (AGLC) or alternatively the American Psychological Association (APA). Students may also use the Harvard referencing method. Additional information regarding the AGLC method of referencing is available http://www.lib.latrobe.edu.au/referencing-tool/aglc/case-law. 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 the 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. Furthermore use academic formal language. Avoid colloquial language and spelling, grammatical and typographical errors. Repeated errors of this kind will be penalised. Referencing help is available at: http://www.latrobe.edu.au/students/academicintegrity/referencing-help Academic Integrity Academic integrity means being honest in academic work and taking responsibility for learning the conventions of scholarship. Academic misconduct includes improper referencing, plagiarism, copying and cheating. You should familiarise yourself with your responsibilities in relation to Academic Integrity and if you have any questions, direct them to your Course Coordinator. Information can be found on the website at: http://www.latrobe.edu.au/students/academic-integrity All assignments will be electronically checked for plagiarism and collusion. When you submit your assignment, Turnitin will issue an Originality Report. Where your Originality Report returns a high matching percentage rate, check that the similarities are not merely due to inappropriate quoting and referencing. Once this is checked you can re-submit an amended version until the due date (but not past the due date). Each re-submission normally takes longer to be uploaded than the first one. Be aware that Issues involving plagiarism and collusion will be referred to the Faculty Disciplinary Committee in accordance with University policy and this is a serious issue. Special Consideration Page 2 of 4 ACC3TAX /Taxation Special Consideration is the term used to describe a process that applies an equity measure to ensure that where any temporary adverse circumstances beyond the control of a student, that impact negatively on that student's ability to demonstrate their learning achievement for an assessment task, is taken into account. Maria Zito La Trobe University Extensions for assessments will only be considered where students meet the eligibility criteria. This must be satisfied in order to receive Special Consideration. For full details students are to refer to the relevant policies, procedures and guidelines website at: http://www.latrobe.edu.au/policy/. Submission of special consideration applications for assignments, midsemester tests and final examinations should be made online at: http://www.latrobe.edu.au/special-consideration. SILOs Assessed 2, 3, 4 and 5 Assessment Criteria The extent to which the assignment demonstrates a detailed analysis of tax issues and an accurate interpretation and application of taxation laws to the facts presented. (38 Marks) The extent to which the assignment demonstrates correct calculation of assessable income, taxable income, tax offsets and tax liability/refund. (12 Marks) The extent to which the assignment is well written, structured and logically organised and demonstrates mastery of the referencing system. For further information please refer to General Assessment Criteria on page 8 of your Student Learning Guide. (10 Marks) Total Marks Page 3 of 4 ACC3TAX /Taxation 60 Maria Zito La Trobe University Mary Johnson is a resident of Australia for tax purposes and is single. Mary is a sales representative for Prime Television and is 58 years of age. However due to a restructure, her employment was terminated on 30th April, 2016. Mary has worked with Prime Television since 1st July 1984. During the tax year ended 30th June, 2016 Mary has received the following amounts: Salary of $45,000 and commission for achieving sales targets of $3,500 from Prime Television (1/7/2015 to 30/04/2016). Entertainment Allowance (1/7/2015 to 30/04/2106) from Prime Television. $1,500 Interest received on her ANZ Bank Account (1/7/2015 to 30/6/2016) $500 Interest received from a Queenstown Term Deposit Account in New Zealand net of withholding tax. (1/7/2015 to 30/6/2016) o (15% has been withheld from this amount) $850 $80,000 under an approved early retirement scheme as part of a genuine redundancy scheme from Prime Television on 30/04/2016. $2,000 for 10 days long service leave owing to her which had accrued since 1 July 2013 from Prime Television on 30/04/2016. $1,500 cash prize for winning an annual competition conducted by Foxtel for the Best Sales Achievement on 31/01/2016. She received a severe injury whilst visiting clients for work on 1 March 2106. As a result of the injury, Mary received the following amounts: o Workers compensation from Prime Television $2,500 th On the 25 of June 2016 Mary joined the Brisbane Lions as a Recruiting Officer and signed an employment contract for five years. She has received no Salary from her employment with the Brisbane Lions during the income tax year ended 30/06/2016. Tax withheld whilst an employee of Prime Television: Salary PAYG tax withholdings (see above) Long Service Leave tax withholdings (see above) $11,100 $640 Required: a) To what extent is Mary assessable on the above transactions? Ensure you state the specific legislation, tax rulings and case law to support your answer. b) Calculate her assessable income, her taxable income and tax payable for the 2015/2016 tax year. Ensure you include the Medicare Levy and any tax offsets Mary may be entitled to. Page 4 of 4 ACC3TAX /Taxation Maria Zito La Trobe University Taxation (ACC3TAX) INDIVIDUAL ASSIGNMENT EXAMPLE Question 1 Tim Brown is 48 years of age and single. Tim has been employed by John West, the UK parent company located in Liverpool, and has been living in England since birth. On the 1st of December 2012 Tim was transferred to Echuca to work for Simplot Australia for a period of five years. This company is a leading Australian Food Manufacturer whose iconic brands include John West. During his employment in Australia Tim lived in a house owned by Simplot Australia and leased his Liverpool residence. During the year ended 30th June 2103 the following transactions took place: Salary from John West in Liverpool (1 July 2012 to 30 November 2012) Salary from Simplot Australia (1.12/2012 to 30/06/2013) Productivity Bonus (paid 5th July 2013) Interest on an Australian Bank Deposit Rental Income for their residence in Liverpool $25,000 $62,000 $2,500 $500 $4,000 Tax Withholdings Tim's Employer withheld $14,200 PAGY tax from his salary (see above). Required: (a) Calculate Tim's Australian taxable income and Australian tax payable for the year ending 30.06.2013. ACC3TAX/Taxation Page 1 of 3 Maria Zito La Trobe University Solution The first issue is to determine whether Tim is a resident or non-resident for Australian Tax purposes. The primary test is whether he is a resident as defined by s 6(1) ITAA36. A resident means a person who 'resides' in Australia and requires four tests to determine residency. If Tim resides in Australia under ordinary concepts, residency status is established and the other three tests in the subsection 6(1) definition need not be considered TR 98/17 par 33. Resides in Australia under ordinary concepts It could be argued that Tim is not a resident of Australia as he has maintained his home in abroad and is only renting it out while he is away. Nevertheless the factors that would support Tim being an Australian resident based on the orientations of TR 98/17 include: I. his physical presence in Australia, II. his employment with an Australian company for 5 years, III. his Australian bank account On balance, it is likely that on the basis of Levene v IRC [1928] AC 217, Tim would be considered a resident of Australia for tax purposes as he \"resides\" here during the relevant period. Has a 'domicile' in Australia or a permanent place of abode Applies mainly to individuals who are usually residents of Australia but during the income year are not living in Australia. Residency has been established therefore this test is not relevant to Tim. 183-day rule Residency has been established therefore this test is not applicable; nevertheless it assists in determining when a person is considered to have commenced to be a resident of Australia. The superannuation test This test is not relevant to Tim based on the facts. Based on the facts it is clear that Tim becomes a resident of Australia on 1/12/2012 on the basis of TR 98/17 par 16. Tim is not a resident of Australia from 1st July to 30th of November 2012. The issue is whether income derived during this time is sourced in Australia. In the case of wages the source of income is where the place of employment is performed on the basis of FCT v French (1957). Therefore the source of the salary earned whilst employed by John West, the parent company located in Liverpool is the UK. Consequently it is excluded from his assessable income. Page 2 of 3 ACC3TAX /Taxation Maria Zito La Trobe University Tim becomes a resident of Australia on 1st of December 2012. As an Australian resident Tim is assessable on his ordinary income under Sec 6-5(2) and statutory income under Sec 6-10(4) from all source from that date on. His assessable income includes the following amounts: Salary from Simplot Australia fully assessable under s 6-5 ITAA97 $62,000 Interest on an Australian Bank Deposit fully assessable under s 6-5 ITAA97 $500 Rental Income for the residence in Liverpool fully assessable under s 6-5 ITAA97 $4,000 Productivity Bonus fully assessable under s 6-5 ITAA97. However this amount has not been derived on the basis of the Carden's Case. Therefore it is not included as assessable income. Total assessable Income $66,500 Allowable deductions There are no allowable deductions available to Tim. Taxable Income S 4-15(1) ITAA97 $66,500 Tax Payable/Refund Tax Free Threshold is reduced [13464 + (4736 x 7/12)] as Tim is a resident of Australia from 1/12/2012. Tax Payable 0 - 16227 16227-37000 37001 -66500 0 Nil + 19% of excess over $16,227 32.50% of excess over 37,000 Tax Payable Nil 3946.87 9587.50 13,534.37 13,534.37 Low Income Tax Offset: [s 159N ITAA36] 2.50 $445- [($66,500 - $37,000) x 0.015] Add Medicare Levy (ITAA36 s 251(S)(1)(a),1.5% of 66,500 997.50 14,529.37 Deduct PAGY Withholdings s 18-15 Sch 1 TAA53 14,200.00 Tax Payable 329.37 Taxable income is below the Medicare surcharge threshold for 2013. ACC3TAX/Taxation Page 3 of 3 Maria Zito La Trobe University