Assignment Essay Questions and Instructions on Taxation Law and Practice

BLO2206 TAXATION LAW AND PRACTICE
SEMESTER 1
ASSIGNMENT

INSTRUCTIONS

Length: Total word length should be approximately 3,000 words.
Marking: Mark allocation is set out for students in the introductory work notes. The answer is to be an individual piece of work. This is not a group assignment.
Due Date: To be submitted on...via Turnitin on  by... Ensure you post the assignment to the assignment Turnitin symbol, not the At Risk Turnitin symbol. Also, a hard copy must be placed in the law assignment box by... The date of receipt is the date of submitted copy.
Referencing: A student can select any proper method for referencing. However, the same referencing style must be used throughout the paper.
Plagiarism A student who plagiarizes will have their assignment returned with a zero mark. Students should familiarize themselves with the university policy on plagiarism.

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QUESTION

Rhonda Ravenscroft completed here MBA degree in 1999 at Victoria University. She already held a degree of Information Technology from Monash University. Soon after gaining her MBA she got a job with McInnes, Prentice and Stoddart, a Merchant Bank in Melbourne. In January 2007 Rhonda married and resigned from her position with McInnes, Prentice and Stoddart. In March of 2007 Rhonda received a phone call from McInnes, Prentice and Stoddart enquiring if she would like to go to New Delhi (India) to be in charge of the setting up of a call centre for complaints and queries in relation to the banking business of McInnes, Prentice and Stoddart. Rhonda agreed. There was no time put on how long this might take. Rhonda was not to be an employee of McInnes, Prentice and Stoddart. Rather, it was agreed she would set up a partnership with her husband (Aaron). Rhonda would do all the work required to fulfill the contract with McInnes, Prentice and Stoddart. Aaron, her husband, would act as the Manager of the partnership. The partnership agreement between Rhonda and her husband was that they would share the profits equally. The contract was to continue until such time as the call centre was fully established.

The partnership, called Ravenscroft Consultancies, was registered in July 2007. The contract the partnership signed with McInnes, Prentice and Stoddart, to set up the call centre in New Delhi, was to commence in August 2007. From August 2007 until December 2007 Rhonda did a lot of work preparing for the job in New Delhi. On 15th January 2008 Rhonda and her husband left for New Delhi. Before leaving they rented out their house. They also took a lease over a flat for 2 years in New Delhi. Rhonda became pregnant in December 2008 and she and her husband returned to Australia in June 2009. The contract the partnership had with McInnes, Prentice and Stoddart was cancelled at the end of December 2009.

The amount the partnership received from McInnes, Prentice and Stoddart was $12,000 Australian a month. This was paid into an Australian bank account at the end of each month. On their return from India Rhonda and her husband decided the partnership would continue. In July 2009 Aaron managed to get another contract for the partnership to run for 12 months, worth $100,000, with the education department of Victoria.

In Australia what will the assessable income for Rhonda and her husband be for the financial years 2007/2008; 2008/2009 and 2009/2010 based on the above information?

NOTE:
1 If you think you need further information to answer the question, explain what that information is and why it is needed. You can then make an assumption as regards the information you think is needed.

2 As partnerships do not pay tax you do not need to concern yourself with the assessable income of the partnership

ASSUMPTIONS

You can assume the partnership paid all the income it received to Rhonda and Aaron in accordance with the profit sharing arrangement. You can also assume the contract with the education department of Victoria was as a result of an advertisement placed in the Age by the education department, and that neither Rhonda or her husband knew anybody in the education department.

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