what is referred to as deductibility?

Francis is an experienced businessman working in the hospitality industry for many years. He has
recently purchased an old restaurant. The commercial kitchen in the restaurant was in poor
condition. Replacing the whole commercial kitchen will cost Francis $23,000. The cost of repairing
the kitchen appliances will be $4,900, however some parts may not be available in the market
anymore as these appliances are too old and obsolete. Francis decided to replace the commercial
kitchen with brand new modern appliances because new modern appliances in the market have
better features and durability.
Advise Francis on the deductibility of the above transactions. Your advice must be supported by
reference to relevant legislation and principles of tax law.

Attachments:HA3042 Taxation Law Individual Assignment T1.2020
HOLMES
INSTITUTE
FACULTY OF
HIGHER
EDUCATION
Assessment Details and Submission Guidelines
Trimester T1 2020
Unit Code HA3042
Unit Title Taxation Law
Assessment Type Assignment
Assessment Title Individual Assignment
Purpose of the
assessment (with
ULO Mapping)
Students are required to follow the instructions by your lecturer to confirm any
relevant information. You also need to follow any relevant announcement on
Blackboard to confirm the due date and time of the assignment.
The individual assignment will assess students on the following learning
outcomes:
1. Practical skills and knowledge of tax law concepts (e.g. Income and deductions
and CGT) (ULO 1).
2. Ability to analyse tax law issues (ULO 2).
3. Ability to apply legal tax principles (ULO 3).
Weight This assignment task accounts for 25 % of total marks in this unit.
Total Marks This assignment task accounts for 25 marks of total marks in this unit.
Word limit Max 2000 words (acceptable to be 10% above or below this word limit)
Due Date Refer to the Unit Outline, as Normal Mode & Block Mode have different due
dates.
Submission
Guidelines
Instructions: Please read carefully to avoid mistakes.  Answer all questions.  This assignment along with a completed Assignment Cover Page is to be
submitted on Blackboard by the due date in soft-copy only.  The self-check links are no longer available as a separate link in each unit’s
assessment. Students are now limited to attempt any given assignment
submission a maximum of three times. After every attempt you will receive a
SafeAssign originality report with Blackboard Learning Management System.
This will provide detailed information about the matches found between your
submitted works and existing sources.  The assignment is to be submitted in accordance with assessment policy
stated in the Unit Outline and Student Handbook.  It is the responsibility of the student submitting the work to ensure that the work
is in fact his/her own work. Incorporating another’s work or ideas into one’s
own work without appropriate acknowledgement is an academic offence.  The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2
HA3042 Taxation Law Individual Assignment T1.2020
cm margins on all four sides of your page with appropriate section headings
and page numbers.
 Reference sources must be cited in the text of the report, and listed
appropriately at the end in a reference list using Harvard referencing style. You
also must refer to relevant legislation and/or case law in your answer.
Reference sources must be cited in the text of the report, and listed
appropriately at the end in a reference list using Harvard referencing style.
 Note: Assessment task is set around the work that you have done in class.
You are not expected to go outside the content of the unit but you are
expected to explore it.
Individual Assignment Specifications
Purpose:
This assignment aims at assessing students on the Learning Outcome from 1 to 3 as mentioned
above.
Assignment structure should be as the following:
Question 1: DEDUCTIBILITY / NON-DEDUCTIBILITY IMPLICATIONS Weighting
Identification of material facts regarding Francis’s deductibility of the commercial
kitchen expenditures in the given scenario, and the critical discussion of tax
consequences relevant to the assignment question.
2 Marks
Identification and analysis of legal issues / legal question and relevant taxation law in
regards to Francis’s deductibility of the commercial kitchen expenditures (e.g. ITAA
1936 and ITAA 1997).
5 Marks
Thorough yet succinct application of tax law (e.g. ITAA 1936 and ITAA 1997) to
material facts in Francis’s deductibility of the commercial kitchen scenario.
3 Marks
Correct information and taxation law regarding the deductibility rules have been
used and properly cited. A detailed analysis has been performed.
2.5 Marks
Detailed and accurate conclusions regarding Francis’s deductibility of the
commercial kitchen expenditures are reached from the discussions.
2.5 Marks
QUESTION 1 TOTAL MARKS: 15 MARKS
Question 2: CALCULATION OF TAXABLE INCOME AND NET TAX PAYABLE Weighting
Calculation of Tom’s business income 2 Marks
Calculation of Tom’s taxable income 3 Marks
Calculation of Tom’s tax on taxable income 2 Marks
Calculation of Tom’s net tax payable 3 Marks
QUESTION 2 TOTAL MARKS: 10 MARKS
HA3042 Taxation Law Individual Assignment T1.2020
Assignments’ Instructions and Requirements
QUESTION 1 (15 MARKS)
Francis is an experienced businessman working in the hospitality industry for many years. He has
recently purchased an old restaurant. The commercial kitchen in the restaurant was in poor
condition. Replacing the whole commercial kitchen will cost Francis $23,000. The cost of repairing
the kitchen appliances will be $4,900, however some parts may not be available in the market
anymore as these appliances are too old and obsolete. Francis decided to replace the commercial
kitchen with brand new modern appliances because new modern appliances in the market have
better features and durability.
Advise Francis on the deductibility of the above transactions. Your advice must be supported by
reference to relevant legislation and principles of tax law.
QUESTION 2 (10 MARKS)
Tom owns a business called Tom’s Band in Westfield Sydney selling musical instruments. Tom also
teaches guitar on a casual basis at the Sydney Guitar School a local musical college. The following
are Tom’s receipts during the 2019-20 financial year:
Particulars $
Tom’s Band sales include $2,500 from sales of musical instruments made last
year. In addition, there is a sale of $3,200 made in April of the current year but
not yet paid.
220,000
Salary from the Sydney Guitar School. This includes Long Service Leave of
$4,200 which Tom is going to take in July of the following year.
53,000
Tom has withdrawal from bank. This was made up of the original capital
deposited of $20,000 plus interest of $1,000 which was paid last year and reinvested. Interest of 5% was paid on the invested money.
22,050
Fully franked dividends includes franking credits of $5,143 were attached. 12,000
Unfranked dividend 4,000
Required:
Assuming Tom does not have allowable deductions, you are required to calculate Tom’s taxable
income and net tax payable.
Assignment Structure should be as the following (students’ responses involves calculations,
and students must refer to the relevant legislation and cases whenever required according to
the questions).
For question 1, address the following elements:
Identification of material facts regarding Francis’s deductibility of the commercial kitchen expenditures
in the given scenario, and the critical discussion of tax consequences relevant to the assignment
question.
HA3042 Taxation Law Individual Assignment T1.2020
Identification and analysis of legal issues / legal question and relevant taxation law in regards to
Francis’s deductibility of the commercial kitchen expenditures (e.g. ITAA 1936 and ITAA 1997).
Thorough yet succinct application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in
Francis’s deductibility of the commercial kitchen scenario.
Correct information and taxation law regarding the deductibility rules have been used and properly
cited. A detailed analysis has been performed.
Detailed and accurate conclusions regarding Francis’s deductibility of the commercial kitchen
expenditures are reached from the discussions.
For question 2, address the following parts:
Calculation of Tom’s business income
Calculation of Tom’s taxable income
Calculation of Tom’s tax on taxable income
Calculation of Tom’s net tax payable
Marking criteria
Marking criteria Weighting
For Question 1, students need to answer the following elements correctly:
Identification of material facts regarding Francis’s deductibility of the commercial
kitchen expenditures in the given scenario, and the critical discussion of tax
consequences relevant to the assignment question.
2 Marks
Identification and analysis of legal issues / legal question and relevant taxation
law in regards to Francis’s deductibility of the commercial kitchen expenditures
(e.g. ITAA 1936 and ITAA 1997).
5 Marks
Thorough yet succinct application of tax law (e.g. ITAA 1936 and ITAA 1997) to
material facts in Francis’s deductibility of the commercial kitchen scenario.
3 Marks
Correct information and taxation law regarding the deductibility rules have been
used and properly cited. A detailed analysis has been performed.
2.5 Marks
Detailed and accurate conclusions regarding Francis’s deductibility of the
commercial kitchen expenditures are reached from the discussions.
2.5 Marks
Question 1 Weight 15 MARKS
For Question 2, students need to answer the following elements correctly:
Calculation of Tom’s business income 2 Marks
Calculation of Tom’s taxable income 3 Marks
Calculation of Tom’s tax on taxable income 3 Marks
Calculation of Tom’s net tax payable 2 Marks
Question 2 Weight 10 MARKS
TOTLA WEIGHT: 25 MARKS
HA3042 Taxation Law Individual Assignment T1.2020
Marking Rubric
Criteria Excellent Very Good Good Satisfactory Unsatisfactory
For Question 1, students need to answer the following elements correctly
Identification of
material facts
regarding
Francis’s
deductibility of the
commercial
kitchen
expenditures.
Student knows how
to use the ITAA
1997, know how to
apply the law to the
Francis’s
deductibility of the
commercial kitchen
expenditure.
Very good
identification of the
Francis’s
deductibility of the
commercial kitchen
expenditures and
discussion of the
issues.
Majority of
relevant issues
identified and
discussed in
relation to the
given scenario.
The area of
deduction law is
correctly identified
but the statement
does not clearly
describe the legal
problem/s and
conclusions that
need to be
addressed in relation
to the given
scenario.
The relevant area of
law in relation to the
given scenario is not
identified.
Identification and
analysis of legal
issues / legal
question and
relevant taxation
law in regards to
Francis’s
deductibility of the
commercial
kitchen
expenditures (e.g.
ITAA 1936 and
ITAA 1997).
All relevant
deduction legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures are
clearly explained
and their correct
source of authority
is given.
All or most of the
relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures are
explained and their
correct source of
authority is given.
Most of the
relevant legal
principles in
relation to the
Francis’s
deductibility of the
commercial
kitchen
expenditures
explained and
their correct
source of authority
is given.
Some identification
of relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures but the
correct source of
authority (section of
Act or relevant case)
has not been cited.
No relevant legal
principles in relation
to the gain or loss
made from the given
scenario have been
identified.
Thorough yet
succinct
application of tax
law (e.g. ITAA 1936
and ITAA 1997) to
material facts in
Francis’s
deductibility of the
commercial
kitchen
expenditures.
The discussion is a
clear and
comprehensive
analysis of the
relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures.
Very good
discussion and
analysis of the
relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures their
application to the
facts to support
logical arguments
given.
Good discussion
and analysis of the
relevant legal
principles in
relation to the
Francis’s
deductibility of the
commercial
kitchen
expenditures and
their application to
the facts to
support logical
arguments given.
The discussion
considers some of
the relevant legal
principles but does
not apply those
principles to the key
facts to support
logical arguments in
relation to the given
scenario.
The discussion of
the facts does not
refer to any relevant
capital gain legal
principles in relation
to the given
scenario.
Correct
information and
taxation law
regarding
Francis’s
deductibility of the
commercial
kitchen
expenditures have
been used and
properly cited. A
detailed analysis
has been
performed.
All relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures are
clearly explained
and their correct
source of authority
is given.
All or most of the
relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures are
explained and their
correct source of
authority is given.
Most of the
relevant legal
principles in
relation to the
Francis’s
deductibility of the
commercial
kitchen
expenditures are
explained and
their correct
source of authority
is given.
Some identification
of relevant legal
principles in relation
to the Francis’s
deductibility of the
commercial kitchen
expenditures, but
the correct source of
authority (section of
Act or relevant case)
has not been cited.
No relevant legal
principles in relation
to the given
scenario have been
identified.
The correct
conclusion is
made in relation to
Francis’s
deductibility of the
commercial
kitchen
expenditures.
Student knows how
to use the ITAA
1997 in relation to
the Francis’s
deductibility of the
commercial kitchen
expenditures, and
know how to apply
the law in a real
scenario.
Very good
identification of the
consequences in
relation the
Francis’s
deductibility of the
commercial kitchen
expenditures and
discussion of the
issues.
Majority of
relevant issues
identified and
discussed in
relation to the
given scenario.
The area of law in
relation to the
Francis’s
deductibility of the
commercial kitchen
expenditures is
correctly identified
but the statement
does not clearly
describe the legal
problem/s and
conclusions that
need to be
addressed.
The relevant area of
law in relation to the
given scenario is not
identified.
HA3042 Taxation Law Individual Assignment T1.2020
For Question 2, students need to answer the following parts correctly
Accurate
calculation of
Tom’s business
income is
presented.
The response has
all the required
elements and
accurate calculation
of the item.
Very good
identificationThe response has
all the required
elements and but
the item is not
calculated
accurately.
Majority of
relevant.
The response has
all the required
elements and but
the item is not
calculated
accurately.
The area of law is
correctly identified.
The response has
some of the required
elements and the
item is not
calculated
accurately.
The response has
not the required
elements and the
item is not
calculated
accurately.
Accurate
calculation of
Tom’s taxable
income is
presented.
The response has
all the required
elements and
accurate calculation
of the item.
Very good
identificationThe response has
all the required
elements and but
the item is not
calculated
accurately.
Majority of
relevant.
The response has
all the required
elements and but
the item is not
calculated
accurately.
The area of law is
correctly identified.
The response has
some of the required
elements and the
item is not
calculated
accurately.
The response has
not the required
elements and the
item is not
calculated
accurately.
Accurate
calculation of
Tom’s tax on
taxable income is
presented.
The response has
all the required
elements and
accurate calculation
of the item.
Very good
identificationThe response has
all the required
elements and but
the item is not
calculated
accurately.
Majority of
relevant.
The response has
all the required
elements and but
the item is not
calculated
accurately.
The area of law is
correctly identified.
The response has
some of the required
elements and the
item is not
calculated
accurately.
The response has
not the required
elements and the
item is not
calculated
accurately.
Accurate
calculation of
Tom’s net tax
payable is
presented.
The response has
all the required
elements and
accurate calculation
of the item.
Very good
identificationThe response has
all the required
elements and but
the item is not
calculated
accurately.
Majority of
relevant.
The response has
all the required
elements and but
the item is not
calculated
accurately.
The area of law is
correctly identified.
The response has
some of the required
elements and the
item is not
calculated
accurately.
The response has
not the required
elements and the
item is not
calculated
accurately.