Nt1330 Unit 2 Individual Assignment
HI5028 TAXATION
INDIVIDUAL ASSIGNMENT 1
TABLE OF CONTENT
QUESTION 1 3
FACTS 3
RELEVANT RULE/LAW 3
QUESTION 2 7
RELEVANT RULE/ APPLICATION 7
CONCLUSION 9
REFERENCES 10
QUESTION 1
Janet (taxpayer) residing in Australia is named as the sole beneficiary of a property (1.85 hectares) with a large homestead as a result of the death of a relative on 7/10/2010. The property is not used for commercial purposes and at the date of death, the property was valued at $1.45million. Settlement took place on 21/12/2010. After moving into the homestead shortly after taking ownership, she planned to take a one-year trip which she had been planning for some time in late 2011. The taxpayer felt that the homestead was far too large for her (she is single), …show more content…
Unit – 1:
Capital Proceeds or Sale Value $ 1.35 million
(-) Cost Base or Cost of Acquisitions $ 0.48 million Gross Capital Gain $0.87 million
Net Capital Gain = Gross Capital Gain * CGT Discount = 0.87 * 50% = $ 0.435 million
Computation of Capital Gain and Capital Gain Taxes for the year 2013-14
As the other property was sold on 9th April 2013, that is after 31st March 2013 so the financial year changes from 2012-13 to 2013-14.
Unit – 2:
Capital Proceeds or Sale Value $ 1.45 million
(-) Cost Base or Cost of Acquisitions $ 0.48 million
Gross Capital Gain $0.97 million
Net Capital Gain = Gross Capital Gain * CGT Discount = 0.97 * 50% = $ 0.485 million
So the following net capital gain would be added to the Janet taxable income for the year 2013-14 under the head Capital Gains and then it would be determined that how much of tax would be paid on taxable income. However, it is worth to be noted that if the relative of Janet had any unapplied capital losses then those capital losses cannot be passed to the beneficiary to offset against her net capital gains. As there was no information given, regarding the capital losses incurred by the relative it is irrelevant whether the same would have been offset by Janet against her Capital
INDIVIDUAL ASSIGNMENT 1
TABLE OF CONTENT
QUESTION 1 3
FACTS 3
RELEVANT RULE/LAW 3
QUESTION 2 7
RELEVANT RULE/ APPLICATION 7
CONCLUSION 9
REFERENCES 10
QUESTION 1
Janet (taxpayer) residing in Australia is named as the sole beneficiary of a property (1.85 hectares) with a large homestead as a result of the death of a relative on 7/10/2010. The property is not used for commercial purposes and at the date of death, the property was valued at $1.45million. Settlement took place on 21/12/2010. After moving into the homestead shortly after taking ownership, she planned to take a one-year trip which she had been planning for some time in late 2011. The taxpayer felt that the homestead was far too large for her (she is single), …show more content…
Unit – 1:
Capital Proceeds or Sale Value $ 1.35 million
(-) Cost Base or Cost of Acquisitions $ 0.48 million Gross Capital Gain $0.87 million
Net Capital Gain = Gross Capital Gain * CGT Discount = 0.87 * 50% = $ 0.435 million
Computation of Capital Gain and Capital Gain Taxes for the year 2013-14
As the other property was sold on 9th April 2013, that is after 31st March 2013 so the financial year changes from 2012-13 to 2013-14.
Unit – 2:
Capital Proceeds or Sale Value $ 1.45 million
(-) Cost Base or Cost of Acquisitions $ 0.48 million
Gross Capital Gain $0.97 million
Net Capital Gain = Gross Capital Gain * CGT Discount = 0.97 * 50% = $ 0.485 million
So the following net capital gain would be added to the Janet taxable income for the year 2013-14 under the head Capital Gains and then it would be determined that how much of tax would be paid on taxable income. However, it is worth to be noted that if the relative of Janet had any unapplied capital losses then those capital losses cannot be passed to the beneficiary to offset against her net capital gains. As there was no information given, regarding the capital losses incurred by the relative it is irrelevant whether the same would have been offset by Janet against her Capital