Britney Steers is an Australian resident taxpayer. The following information relates to the tax year ending 30 June 2022. Please discuss the income tax implications of each of the below, following a very brief introduction that identifies your overall method for answering the question and the core tax provisions that render Britney subject to Australian income tax (so focus here on Divisions 4 and 6 ITAA97) (1 mark). You are expected to apply material only from modules 1 to 6.

Due to her good marks, in the final 6 months (1 July 2021 to 31 December 2021) of a commerce degree she was studying at UWA, Britney received $5,000 exempt income in the form of a scholarship for her commerce degree. (1 mark)

BritneygraduatedfromUWAandwasfortunatetobeofferedagraduatepositioninan accounting firm. Britney started at the firm on 1 January 2022 and continues to work there. Britney's salary is $60,000 per annum plus 9.5% compulsory superannuation which is paid to her superannuation fund. (3 marks)

In addition to her salary, the accounting firm agreed to pay Britney $1,000 on 1 January 2022 to assist her in purchasing work clothes. The firm has a very strict policy about clothes that qualify for the payment, setting out a limited range of colours and styles so as to maintain a professional corporate image. Britney spends the $1,000 on work clothes and complies with the firm's clothing policy, but due to her good selections, she finds that she is sometimes still able to wear the clothes when attending personal events (amounting to 10% of the time that the clothes are worn). (5 marks)

Note that the tax treatment of a receipt (as revenue or capital) does not necessarily determine the treatment of a corresponding expense.

Outside of the accounting firm, Britney spends most of her time attending music concerts. In fact, from early childhood she has studied various musical instruments and played in bands and she knows the Perth music scene very well. One night she discovers a new band (Tame Antelope) that she thinks has the potential to become a world-leading band. The band needs money and help with connections to succeed, so Britney invests her life savings of $10,000 in buying the copyright to the band's 5 songs (assume this is an outgoing of capital), arranges with her lawyer friend to draft up the contract and convinces her band manager friend to introduce the band to music companies. Britney's aim is to achieve a record deal for the band and for Britney to on- sell the copyright to the music company. On 1 May 2022, the band signs with Sony Music. However, instead of buying the copyright from Britney, Sony Music pays Britney $50,000 for a 5-year licence to use the copyright for the songs, with additional monthly payments of $1,000 under the licence. (6 marks)

Britney provides some extra help to Tame Antelope in lining up music performances to market their soon-to-be-released record. Britney gives an invoice to Tame Antelope for $1,000 to cover her time in arranging performances for the band. On 1 June 2022, the lead singer of Tame Antelope wrote to Britney to express his heartfelt thanks for all the help Britney had given the band. The lead singer enclosed a cheque for $1,000 in respect of the invoice and a gold necklace worth $5,000 which the lead singer begged Britney to accept as a token of the band's affection and esteem. (5 marks)

Britney is sued by a copyright troll for alleged breach of copyright in respect of all the Tame Antelope songs that she has licensed to Sony Music. Horrified about the potential impact on her reputation in Perth society and the effective destruction of her copyright rights, Britney engages a lawyer to defend the copyright infringement action. She receives an invoice from her lawyer for $10,000 in legal fees. (6 marks)

Britney takes a two week holiday in June and rents out her apartment (her main residence) on Airbnb for the two weeks, receiving $1,000. Britney pays a $200 commission to Airbnb. This is first time that she has rented her apartment out. (3 marks)

There are two parts to this assignment. You must advise Britney on her income tax position (marks allocated above). You must also calculate her overall tax liability for the year ended 30 June 2022. Please make the following assumptions when answering this question:

Britney does have a HECS-HELP Debt of $10,000;

Britney does have private health insurance;

Britney's accounting employer does not withhold any amounts of tax under the PAYG

rules; and

The superannuation payments have no income tax consequences for Britney and can

be ignored.