Assignment title: Information
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Problem solving question
Value: 15%
Due date: 18-Sep-2016
Return date: 14-Oct-2016
Length: not exceeding 3,000 words
Question
Megan is a mining engineer. Megan spends nearly 8 months of every year out of Australia for work. She is employed predominately by one (Australian based) mining company which issue her a Payment Summary on an annual basis and pay superannuation on her behalf. Megan earned $180,000 gross income from this mining company during the year and she also salary sacrificed $20,000 into superannuation. Megan has late this year accepted a one-off payment of $75,000 agreeing that next year she will not perform any mining services for any other mining company.
Megan performed some freelance services for a number of other mining companies (also Australian based) during the year on an ad hoc basis for which she provided an ABN and a tax invoice. These various invoices totaled $121,000 including GST. Megan also received a case of vintage champagne valued at $1,800 together with a cash amount of $5,000 as Christmas gifts from 2 of these mining companies.
During the year Megan together with a fellow mine engineering specialist designed a particularly useful item of mining equipment which one mining company paid $440,000 which included all rights to the equipment including its intellectual property. This is a one off venture and Megan has no intention of including her half share in her tax return as assessable income this year.
Megan also performs landscape painting activities. During the year her painting skills were recognised via an exhibition of her artwork to such an extent that people paid her $22,000 for the various works exhibited. Megan then won an award of $33,000 from an art industry representative entity for her exhibition. Megan has no intention of including these amounts in her next tax return as she has always enjoyed her painting as a hobby.
Required
You are to advise Megan of the assessability or non-assessability of the income earned in the current year for each of the activities in which she is involved. Your response will identify the key issues raised and provide a coherent argument for your conclusion based upon relevant legislation, case law and other material.
Rationale
This assessment task covers Topics 1 to 9. More specifically it tests your understanding of the tax forumla in relation to different types of income and the general rules relating to deductions. This assessment 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
Marking criteria
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.
Your mark will depend upon the degree in which you demonstrate your understanding of the topics covered thus far, and the overall presentation of your advice to your client. For guidance, please refer to the section. "Presentation".