Question 1 - Land Sales
Mr and Mrs Fry are not liable for under CB 6 as the land was acquired with the intention that the family would spend weekends there. Under CB 7(2) r liable for as it exclusion under Cb 16 because it is a holiday home of Mr and Mrs Fry therefore it is residential home. (b)
* Whether or not Mr and Mrs Laurie will constitute “income” for the sale of sub-divided land under CB 6 – 23 of ITA 2007? * The total land that is on sale is 3500m2 and Somerfield Suburbs Ltd keeps the 500m2 and the 500m2 of Sale Office is excluded. It is liable under CB 6 and CB (1)(b) as the business had intention to subdivide the land that they had leftover. It is not liable under CB 8 as the land is not required or used for landfill. CB 9 is not relevant as it not dealing with business. It is liable Under CB 10 as it is an income for the subdivision of land and business that they company is using. Cb 13 – cb 15 are not relevant in this case. * In conclusion the sale of the 3500m2 that is being sold are taxable.
Question 2 – Land and Personal Property Sales
From my point of view Adam Smith’s four canons for taxation meets the personal property sales. This is because: 1. Equity – horizontal equity as it treats individual in similar ways therefore it is fair. 2. Efficiency – taxpayer wont be required to go over through the legislation too much to find the out the section if they are liable or not for tax. 3. Certainty– having a personal property legislation provides a clear understanding. This will easy than going all the subsection and finding out which they are liable under or not. 4. Convenience/simplicity – easier to use as the taxpayers can find out the amount that meets the particular part of the act than it is with the income tax.
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