Question 1 (25 Marks)
Edward had just graduated as a chartered accountant. He joined PwC, a major accounting firm in Sydney as an audit junior where he was living with his parents in Sydney. After two years he was promoted as an audit senior and was posted to Singapore for a period of two years. He found a share apartment and adapted to the new lifestyle in Singapore. Edward closed his Australian bank account and applied for a work visa in Singapore as he was not sure if he would return to Australia after two years. After the end of two years in Singapore, he took a year leave of absence from his work and traveled to Europe before returning to Australia. Before he left for Europe, he sent all his personal effects except for his clothes to his parent’s house in Sydney. On his return home to Sydney, he moved out of his parent’s house and rented an apartment.
Required
Discuss if Edward is a tax resident of Australia during his absence from Australia. You must make reference to the relevant legislation, rulings and case law.
QUESTION 2 (10 marks)
John owns a backyard furniture factory out of the premises that he purchased 30 years ago for $300,000. He has been operating the factory for the past 10 years. Recently, his neighbourhood was sought after by land developers to build residential properties. As a result, the value of the land where John operates his factory had surged in value. John enters into a negotiation with several property developers and had finally sold the land for $5 million. After selling his land, he moved his factory to another location.
Required:
Advise John of his tax consequences on the sale of the land. You must make reference to the relevant legislation and case law.
Rationale
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This assessment task will assess the following learning outcome/s:
- be able to locate and analyse the sources of taxation law in Australia.
- be able to describe and access the Australian regulatory taxation system and compliance regime.
- be able to interpret legislation to compute taxable income and allowable deductions to determine taxation liabilities and evaluate appropriate offsets.
- be able to critically evaluate the law relating to capital gains taxation and trading stock and calculate the relevant tax liabilities.
This assessment task covers Topics 2 to 12 and has been designed to ensure that you are engaging with the subject content on a regular basis and to assess your ability to:
- gather and integrate your knowledge on the Australian taxation system;
- describe and access the Australian regulatory taxation system;
- interpret legislation to compute taxable income and allowable deductions to determine taxation liabilities;
- investigate in depth the cases, rulings and legislation that are fundamental to taxation law;
- demonstrate your ability to apply that knowledge to a hypothetical, practical situation;
- exercise critical and reflective judgment;
- demonstrate your ability to conduct research using provided materials as well as other legal resources; and
- develop your written skills
Question 1
Question 1 requires you to identify the issues relating the the tax residency and source of income of the taxpayer. You are then required to identify and apply the legal principles relating to ordinary income and statutory income and critically evaluate them..
Question 2
Question 2 requires you to address the principles related to assessable income. You must be able to discuss and crtically evaluate the concept of revenue and capital receipt. .
Marking criteria and standards
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In assessing your assignment the marker will expect you to:
- present an essay that is readable and coherent;
- use appropriate language, correct spelling and grammar;
- identify and analyse relevant issues;
- explain and apply relevant cases, rulings and legislation;
- reach a sound and well-reasoned conclusion;
- use appropriate referencing; and
- demonstrate time management skills.
The following criteria will form the basis of assignment of marks for the problem solving question.
| Criteria | High Distinction | Distinction | Credit | Pass | Fail |
| Students are required to answer problem type questions in order to demonstrate: | To meet this level you will achieve a cumulative mark of 85-100%. A mark in this range indicates that a student: | To meet this level you will achieve a cumulative mark of 75-84%. A mark in this range indicates that a student: | To meet this level you will achieve a cumulative mark of 65-74%. A mark in this range indicates that a student: | To meet this level you will achieve a cumulative mark of 50-64%. A mark in this range indicates that a student: | At this level you will obtain a mark of 0-49%. A mark in this range indicates that a student: |
| Identification of relevant legal issues | Correctly identifies all legal issues and formulates them clearly with consideration of all links to relevant law, with no errors. | Correctly identifies all the tax law issuesand formulates them with consideration of links to relevant law, with only minor errors. | Identifies and correctly formulates most major ltax law issues and supported by relevant law. | Identifies some tax lawl issues. May or may not formulate them correctly. Considers and links to relevant law, | Identifies no relevant issues or only a few of them. Some of these may be unclearly formulated. Considers few contextual factors of relevant law. |
| Explanation of law and citation of relevant legal authority | Provides a complete explanation of the law, justified by relevant taxation law, with no errors. Discussion identifies key statute and case law stating relevant principles and shows insight in identification and discussion of potentially hidden issues. Research of relevant legal authority shows a breadth of investigation through detailed analysis, discussion and tax computation. | Provides a comprehensive explanation of the taxation law with few errors, substantiated by relevant case and statute law stating relevant principles. Research of relevant legal authority shows a breadth of investigation through detailed analysis, discussion and tax computation. | Provides a substantial explanation of taxation law and tax computation but with some errors, substantiated by significant legal authority in the form of statute and case law. | Provides a basic explanation of the taxation law and tax computation, but with significant errors, substantiated by some legal authority. | Provides incorrect or limited explanation of the taxation law and tax computation using no, or only a limited range of, authority. |
| Application of legal principles to the facts and tax computation | Applies the law to the facts so as to reach a correct conclusion on all issues, with no errors. Argument discusses linkages between facts and the law and considers counter-arguments, completes tax computation correctly if required and evaluates the impacts of applying the law to the situation considering a broad range of factors that may affect the application. Conclusion draws together advice for client. | Applies the law correctly to the facts so as to address all issues, with only minor errors. Argument discusses linkages between facts and the law, completes tax computation correctly if required and evaluates the impacts of applying the law to the situation considering factors that may affect the application. Conclusion draws together advice for client. |
Applies the law correctly to most issues arising from the facts, but with some errors. Argument discusses application of the law and completes tax computation correctly if required with some minor errors. Conclusion summarises advice for client. | Makes a basic attempt to apply the law to the facts, but applies wrong law and / or contains significant errors in the application. Argument summarises application of the law, formula for tax computation identified and completed with errors. Advice to client is incomplete. | Paper does not correctly apply law to the facts and / or applies incorrect law. May be descriptive, rather than putting forward a reasoned argument. Does not attempt tax computations. |
| Compliance with the Style Guide, tax computation format and overall structure. | Uses Style Guide comprehensively, accurately and consistently. Uses ILAC mode and tax computation format. Extremely well structured and organised, with one main argument introduced per paragraph, supported by well-written supporting sentences. | Uses Style Guide accurately and with only minimal errors. Uses ILAC model tax computation format. Well structured, with one main argument introduced per paragraph. | Adequate use of Style Guide, with some errors or lapses. Uses ILAC model, tax tax computation format and is clearly structured. | Limited or inconsistent use of Style Guide. Some attempt at use of ILAC model, tax computation format and at structuring of answer. | Poor, inconsistent or inaccurate use of Style Guide. Poorly structured. Inadequate or no use of paragraphs. May have disregarded the ILAC model and tax computation format. |
| Written expression, calculation and editing. | Uses appropriate academic writing which is formal, impersonal and which contains no spelling, grammar,punctuation and calculation errors. Paper demonstrates careful proofreading. | Uses appropriate academic writing which is formal, and impersonal with only very minor spelling, grammar, punctuation and calculation errors. Paper demonstrates careful proofreading. | Uses appropriate academic writing which is formal and impersonal, with a few spelling, grammar, punctuation and calculation errors. Paper demonstrates evidence of proofreading. | Significant spelling, grammar, punctuation and calculation errors but the paper is readable and demonstrates some attempt at proofreading. | Poor grammar, spelling,and /or punctuation. Showing little or no calculation. Paper gives no evidence of having been proof-read. |
Presentation
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General Guidance for Law Assessment Tasks:
- Type your assignment clearly using sentences in paragraphs, not dot points.
- This is a research paper and you are expected to locate your own journal articles and books for material to back up your arguments.
- Clearly show the subject name, your name and the date at the beginning of the assignment.
- Use size A4 paper and leave at least a 3 cm margin on the right-hand side of the page. (This is the best format for both marking and photocopying.)
- Retain a copy of each assignment. This overcomes any problems should your assignment be lost in transit, even though this rarely happens.
- Number each page of the assignment.
- The answers should be confined to 3,500 words in total, bibliography excluded. Both assignments should be neatly typed in Times New Roman, 12 point font.
- A consistent system of footnotes or the APA Referencing System is required. Case and statute names should be italicised.
- Answers must be original. They should demonstrate that students not only have read and understood the Study Guide and prescribed readings but also have broadened their knowledge by having read other reference works. Marks will not be awarded for duplication of paragraphs from the Modules or textbooks.
- Answers should have a complete bibliography listing all books and articles consulted. Beware of using the unacknowledged work of others. Plagiarism will result in zero marks and possible failure of the subject. (Refer to handbook rules).
- Students must, in the course of answering questions, refer to and discuss relevant case authorities and appropriate statutory provisions in order to support the propositions and submissions made.