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Table Of Contents

6. Capital Receipts are not Ordinary Income
AAT Case 822 - Sign on Fee
AAT Case 7422 – Sign on Fee
Taxation Ruling IT 2307 - Payment to sports persons
Restrictive covenants: Higgs v Olivier [3.140], FCT v Woite [3.170]
8. Income Earning Activity
9. Compensation Receipts
Statutory Income
Summary
Income from Personal Exertion of Services
Employees and Independent Contractors
Ordinary Income from services
Statutory Income from Services
Gifts, Windfalls and Prizes
Prizes
UK Cases
Fringe Benefits Tax
Applying the FBTAA
Step 1
Definition
Types of Fringe Benefits
Exemptions
Interaction between FBTAA and ITAA
Step 2 – Calculating the taxable value
Reduction Factors of Taxable Value
Step 3 – Calculating the FBT Payable
INCOME FROM BUSINESS
Is there a “business”?
Hypothetical
Business / Hobby distinction
Timing
Ordinary / statutory income from business
Isolated profit-making ventures
Receipts in Ordinary Course of Business
Criticism of Myer
Taxation Ruling 92/3
CAPITAL RECEIPTS FROM BUSINESS
Compensation Receipts
INCOME FROM PROPERTY
Royalties
CAPITAL GAINS TAX
Introduction
Framework for Approaching CGT
Step 1: Does the transaction give rise to CGT consequences?
CGT Event A1
CGT Events C1 and C2
Collectables
Personal Use Asset
CGT Exemptions
Main residence exemption (Subdiv 118-B)
Rollovers
Step 2: Calculating the gain or loss from a CGT event
Capital proceeds → s 116-20
Cost Base → s 110-25
Step 3: Calculating net gains and losses
2 Methods:
Indexation → Div 114
Discount Percentage → Div 115
Reconciling income tax and CGT
Taxing investment gains lower than wages
DEDUCTIONS
The General Deduction Provision
The Positive Limbs
1. Relationship between the two positive limbs
Loss or Outgoing
2. Nexus
3. Incurred
4. Timing Issues
5. Apportionment
6. Taxpayer’s Purpose
7. Substantiation
Negative Limbs
Capital Expenses
Private or Domestic Expenditure
Specific Deduction Provisions
Repairs
Tax Losses
Restrictions on Deductions
Fines and Penalties
Payments to related entities (s26-35)
Entertainment Expenses
Non-Commercial Loss Rules
CAPITAL EXPENSES
Summary re current / capital distinction
Tax Treatment of a Capital Expense
Non-Deductible Capital Expenses
Section 40-880
The Uniform Capital Allowance Regime
Depreciating Assets
Who can claim Depreciation?
Measuring Decline in Value
Other Provisions
Balancing adjustments (Div 40-D) and CGT
Summary re capital expenses
TAX AVOIDANCE
What is tax avoidance?
Judicial approaches to tax avoidance
Specific Anti-avoidance Provisions
General Anti-Avoidance Provisions
Part IVA ITAA36
1. ‘Scheme’
2. ‘Tax Benefit’
3. Relevant Purpose
Cases on Part IVA
Consequences for Breach Part IVA
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Tax Law Revision Notes

Tax Law Revision Notes

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Published by Rudolph Hosri

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Published by: Rudolph Hosri on Oct 30, 2010
Copyright:Attribution Non-commercial

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08/13/2013

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