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Principles of Taxation Law LAWS7031
Assessment 2: Major Assignment Q3 2024

Task: Provide advice to your client. Your answers must include relevant legislation, cases and Rulings. You must clearly reference your answers with footnotes in compliance with AGLC4

Refer to the Learning Guide for details about Criteria and Standards for marking processes, including word the citation standards and ways to structure your argument in answer to the question.

Length: 2500 words.
Value: 35% (35 marks)

Due Date: Monday, July 29, 2024, by 23:59 AEST – submission is online via Turnitin

Background Facts:

Malik arrived in Australia on a student visa in February 2022 to complete a four-year IT Degree at WSU.

Each month since he arrived in Australia, he earned AU$1,250 equivalent from rent on rental properties owned by him alone in Bangladesh.

From 1 March 2022, Malik worked at Hungry Jacks. Earning $2,000 per month.

Malik liked working on computers and in May 2022 he began repairing computers in his spare time at home. He did this mostly for friends and fellow students. At first, he just charged people for parts, but then from July 2022, he began charging people $50 for each hour he worked. By 30 June 2023 he had earned $5,500 above costs from this activity.

From 1 July 2023 he became so busy repairing computers; that he quit his job at Hungry Jacks on 30 June 2023; and he estimates that his income from computer repairs for the 2024 financial year will be about $135,000 with cost of about $60,000.

In November 2023, Malik had published a book on Computer Science that was adopted for a course by WSU. The publisher
paid Malik $1,000 for the right to publish the book; and
pays Malik $25 royalty on each book sold.
To June 30, 2024, 55 books have been sold.

In July 2024 Malik became a permanent resident visa holder.

In July 2024 Malik came to you his tax agent/accountant and explains that:

1.He had never reported his Bangladesh income from the rental properties in his Australian tax returns because he considered this had nothing to do with Australia.
2.In the 2023 financial year, he did not report any profit from his computer repair activity because he considered this to be a hobby. Advise Malik, by reference to tax cases, legislation and or rulings whether this is correct. In your answer you should discuss at what point if any this becomes a business.
3.Advise Malik of his likely tax payable for the 2024 year. Your answer should discuss all his activity and the book payments mining and computer sales.
4.Calculate his tax payable for 2024.
5.Advise Malik on the tax effect of the changed visa status from 1 July 2024

Rubric Marking Criteria

These are the seven marking criteria on Turnitin:

1.Correctly identify all the relevant elements of the Australian Income Tax system touched on in the question: Legal Issues: Identification (ULO1). [5 Marks]

2.In addressing the issues Apply the relevance of tax law information in decided taxation cases, effectively and appropriately to identified issues, displaying clear understanding of how the case law and legislation are applied in solving tax law problems: (ULO2) (ULO3) [5 Marks]

3.Correctly identify issues concerning residence and source and income from business and income from property for all years. (ULO2) (ULO3). [5 Marks]

4.Correctly identify issue concerning business or hobby for Malik’s activity with computer. (ULO2) (ULO3) [5 Marks]

5.Correctly identify issues concerning capital and income streams in relation to Maliks published textbook. (ULO2) (ULO3) [5 Marks]

6.Issue. Correctly identify all taxable income and assessable income and calculate and estimate of tax payable in relation to the 2023 Financial Year including both ordinary and statutory income. (ULO1) [5 Marks]

7.Coherence and persuasiveness of arguments and use of correct citation in accordance with the Guidelines. (ULO2) (ULO3) [5 Marks].