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Taxation Law in Australia

  • Date Submitted: 02/26/2014 12:18 AM
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This assignment is divided into four parts following the sequence of the assignment questions. In the first part, I discuss the assessibility of payment from school; the second part is about the accessibility of devices offered by the school; in the third part, the deductibility of expense on breakfast of students is discussed, and the last part is about the profit making from an agreement.
1. Payment for teaching
1.1 Annual salary
According to s 6-5 of the ITAA Act 1997, the annual salary of 78,000 to Maxine is obviously an ordinary income, as this payment was given by her employer for her employment as a full-time teacher.
1.2 “extra duties allowance”
Maxine was paid an “extra duties allowance” amount to $1320 for the 2012-2013 income year, as being the coach of the Australian rules football team.
The allowance was of an income nature. There was a sufficient nexus between the taxpayer`s receipt and her employment, as the reward was given for her employment or service as a coach.
The “allowance” was weekly paid to Maxine for her service as a coach. While it was only paid during the football season, it still had the character of periodicity, recurrence and regularity. While it is relevant, it is not decisive.
Thus, this allowance received by the taxpayer was assessable under both s 6-5 and s 15-2 of the ITAA Act 1997. However, according to the negative limb of s 15-2 (3) (d), the assessable amount under s 6-5 cannot be included in s 15-2 to avoid double tax. In conclusion, the allowance is assessable as ordinary income under s6-5.
2. Electronic device for work
Maxine was given a tablet and a laptop by the school to assist her with her work duties, and she had these devices as private property.
The ATO may claim that the devices are assessable income under both s 6-5 and s 15-2.   First, though the rewards were not in cash, they were convertible into cash at a value of $800 (tablet PC) and $2000 (laptop) respectively. Secondly, it was...


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