Business Law/Accounting Question. It's not a project.

Problem question Cyril is a tax academic who teaches at University College Launceston (UCL). Because of his ability as a teacher, in recent years he has been able to supplement his income by fees paid to him for writing and teaching short courses at several institutions in Asia. He has an interest in environmental issues and for many years has dreamt of buying some acreage where he can install environmentally friendly technology and eventually retire and watch the trees grow. He finds the ideal property near Cradle Mountain and purchases it for $300,000. He borrows $280,000 at 7% interest from Big Bank to fund the purchase. Prior to completing the purchase Cyril approaches Enviro-energy Pty Ltd, a provider of environmentally friendly energy, and enters into an agreement with them under which the company will erect 10 electricity generating windmills on Cyril's property. Enviro-energy Pty Ltd agrees to pay Cyril $5,000 per annum for the right to locate windmills on his property. The fee is payable whether or not the windmills are operating through the year. At about the same time Cyril approaches TAS State Forests and enters into an agreement with them under which the State Forests will pay Cyril $5,000 per annum for the right to enter on his property to plant native trees in cleared areas and to remove trees which they have previously planted. This fee is payable whether or not the State Forests actually plant or remove any trees on Cyril's property. Cyril also approaches Enviro-sanctuary Ltd (a company that specialises in developing sanctuaries for endangered species) and enters into an agreement under which Enviro-sanctuary will fence a portion of Cyril's property and will be given the right to locate endangered species in the fenced area for a fee of $5,000 per annum. Again the $5,000 per annum is payable whether or not the fencing takes place and whether or not Enviro-sanctuary actually locates any endangered species in the fenced area. Each of these agreements is for a term of 10 years. After completion of the purchase, Cyril then borrows another $100,000 from Big Bank at 7% and constructs an environmentally friendly cottage on the property. Cyril equips the cottage with computers and high speed internet access. Cyril then moves into the cottage. He commutes from the cottage to Launceston to teach. Although an office is maintained for him at UCL, Cyril subcontracts out all but the first and last weeks of his teaching in all his courses. He incorporates a company 'Cyril Academic Consultant Pty Ltd' of which he is sole shareholder and director. Thereafter, while based at his property, Cyril devotes all his time to writing and teaching courses for Asian universities as an employee of Cyril Academic Consultant. Cyril Academic Consultant Pty Ltd takes out a professional indemnity insurance policy in respect of Cyril's activities. All communications with the Asian universities are conducted through Cyril's property. In the current year Cyril received a salary of $100,000 from UCL. Cyril Academic Consulting Pty Ltd received consulting fees of $800,000 in consulting fees from Asian universities and paid Cyril a salary of $8,000 Later in the same year Enviro-sanctuary is placed into receivership and the receiver, with a view to reducing costs, cancels Cyril's contract and offers to pay Cyril $15,000 as compensation for the loss of the agreement. Cyril accepts the offer and requests that payment be made to Cyril Academic Consulting Pty Ltd. The receiver of Enviro- sanctuary duly makes the payment as per Cyril's request. Advise Cyril and as to whether any of his receipts are income to him and, if so, on what basis. Advise Cyril Academic Consulting Pty Ltd as to whether any of the receipts are income to it. Do not consider the possible operation of either the general anti avoidance provision or of the CGT provisions. Do not consider the deductibility, or otherwise, of any of Cyril's expenses at this point