Foundation of taxation law  -15pages

Assessment item 2

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Problem solving question

Value: 35%

Due Date: 17-Sep-2018

Return Date: 11-Oct-2018

Length: 3,500 words

Submission method options: Alternative submission method


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Question 1

Amber owned and operated a boutique chocolate shop in Sydney that she purchased for $240,000 in August 2010. The purchase price consisted of equipment and stock worth $110,000 and the balance being goodwill. Following the birth of her child, Amber decided to sell the shop in February 2018 for $440,000 of which $280,000 was attributed to goodwill.

Amber was also required to sign a contract restricting her from opening another similar business within a 20km radius for the next 5 years. She received an additional sum of $50,000 for this contract.

Due to their expanding family, Amber and her husband purchased a four bedroom home in the outer suburbs of Sydney in June 2018. The purchase was partly funded by the sale of the business but also by the sale of Amber’s one bedroom inner-city apartment. Amber had lived in the apartment since she inherited it from her Uncle in October 2013. He had purchased it in September 1992 for $180,000 and lived in it until he died. At the time of his death the apartment was   valued at $390,000.  Amber signed a contract for the sale of the apartment in May 2018 for $550,000 and settlement took place in July 2018.

Advise Amber of the taxation consequences of these transactions. You are not required to calculate any capital gains or losses. (20 marks)

Question 2

Jamie is a real estate agent working for ‘Houses R Us’ real estate. As part of his employment contract, Jamie receives a base salary of $50,000 per annum plus 10% of the agency’s commission on sold properties where he has had a direct connection with the sale. He is also provided with a car, a Toyota Kluger costing $48,000. He is not required to contribute to the running costs of the car which total $13,500 per year and is allowed to use the car outside of work hours and on weekends.

Jamie’s salary package also includes a laptop which cost $2,300 and a mobile phone costing $1,200 per year. His employer also reimburses his annual professional subscription of $550 and provides him with an entertainment allowance of $2,000 per year.

Jamie was also lucky enough to achieve the highest sales for the previous six month period and was rewarded with a high tech home entertainment system worth $4,800.

‘Houses R Us’ also offer their staff loans of up to $100,000 towards purchasing their own house at a rate of 4% per annum. Jamie is considering taking up this offer to purchase his first home.

Advise Jamie and ‘Houses R Us’ of the taxation and FBT consequences of these transactions. You are not required to calculate any FBT liability.(15 marks)


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This assessment task will assess the following learning outcomes:

  • be able to identify and explain the rules of law      relating to taxation law topics covered in the subject.
  • be able demonstrate a capacity to engage in legal      research.
  • be able to use legal research skills to apply the law      to legal problems relating to taxation so as to reach a solution.
  • be able to analyse legal rules so as to differentiate      between possible outcomes to the legal issues arising from novel fact      situations.

Covering topics 5 to 11, this assignment has been designed to ensure that students are able to identify and apply legislation, rulings and case law to the issues identified as well as demonstrate the ability to analyse the issues fully and apply this knowledge to a hypothetical, practical situation.

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.



High Distinction






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 issues and 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  <a href=””>taxation law</a> 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 model 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 and 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.


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General Guidance for Law Assessment Tasks:

•Word-process or type your assignment clearly.
•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.)
•Number each page of the assignment.
•The answers should be confined to 3,500 words in total, bibliography excluded. 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.

Also note the following style guide:

1. You should use the ILAC style of essay writing for this assignment

2. Do not re-state the question as part of your answer.  This often gets repeated in the ‘issue’ section, however that is incorrect.
3. Use in-text referencing. Do not use footnotes.
4. Names of cases or statutes should be italicised, and followed by the jurisdiction not in italics, for example: Acts Interpretation Act 1901. Note the abbreviation for ‘Commonwealth’ is ‘Cth’ not ‘Cwlth’.

5. Do not start a new line simply because you are starting a new sentence.

6. Start each paragraph on a new line, and leave a clear line gap after the preceding paragraph. Don’t make your paragraphs too long.

7. You must end your assignment with a bibliography that is divided into three separate parts, listing statutes, cases and books / articles / on-line Modules.


NOTE: Assessments for this subject are required to be submitted via EASTS.


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Your answers to both the Problem Solving Questions in this Assessment task must be fully referenced. Referencing is the acknowledgement of information sources in your work; it is the appropriate way to give credit to the original owner of an idea, piece of writing or creative work. You will be required to use the APA style of referencing and guidelines for using this style can be found on the CSU Referencing website at