BACC3004 – Tax Law

Assessment Task 2: Individual Assignment

Australian Institute of Higher Education / Holmes Institute / Similar Institution

Trimester 1, 2026

Weighting: 30%

Assessment Description

This assignment tests your ability to apply core principles of Australian taxation law to practical scenarios. You will calculate tax payable, analyse fringe benefit provisions, and compute net capital gains. The task requires accurate interpretation of legislation, case law, and ATO guidance. All answers must show clear workings and reference relevant sections of the Income Tax Assessment Act 1936/1997, Fringe Benefits Tax Assessment Act 1986, and applicable case authorities.

Submission Requirements

1. Individual submission only. No group work permitted.
2. Word limit: 1,800–2,200 words (excluding calculations, tables, and reference list).
3. Format: Times New Roman or Arial, 12 pt font, 1.5 line spacing, numbered pages.
4. Submit electronically via the unit Blackboard site by Friday 5:00 pm Week 8.
5. Use Harvard referencing style for all citations and the reference list.
6. Minimum 8 references, including the prescribed textbook and at least 5 recent peer-reviewed or authoritative sources (e.g., journal articles, ATO rulings, case law).
7. Late submissions incur a 5% penalty per day (or part day) unless an approved extension is granted.
8. Plagiarism will be checked via Turnitin. Breaches are handled under the Academic Integrity Policy.

Questions

Question 1 (10 marks)

Nicholas, an Australian resident, received the following amounts during the 2024/25 income year: salary and wages $38,000, interest $3,500, exempt compensation $25,000, commission $4,500, Living Away from Home Allowance $22,000, overtime allowance $2,200, and a rental loss of $10,000. PAYG withholding totalled $6,800. Ignore tax offsets and the Medicare levy.

Required: Calculate Nicholas’s tax payable or refund for the year. Show all workings, including assessable income, allowable deductions, and application of the tax rates.

Question 2 (10 marks)

Disco Biscuit Pty Ltd, a resident company operating a car dealership, provided vehicles to the following individuals during the 2024/25 FBT year. For each case, determine whether the provision constitutes a fringe benefit. Cite relevant sections of the Fringe Benefits Tax Assessment Act 1986 and any applicable case law or rulings.

1. Mary, wife of salesperson Damon, received private use of a company car.
2. Gabby, an independent advertising consultant, received a Mercedes instead of cash fees under a mutual agreement.
3. Nigel, a salesperson, received private use of a luxury Lexus.
4. Tristan, managing director, received a Jaguar instead of a director’s fee.

Question 3 (10 marks)

Maxwell Johnson disposed of the following assets during the 2024/25 income year (all held >12 months; relevant thresholds met):

• Loss on motor vehicle: $6,200
• Gain on yacht (cost base not indexed): $23,500
• Gain on antique crockery (indexed): $14,800
• Loss on jewellery: $1,500
• Gain on investment land (cost base not indexed): $26,000
• Gain on main residence (cost base not indexed): $40,000
• Loss on shares: $20,100
• Gain on rental property (indexed): $22,500
• Gain on rare comic collection (cost base not indexed): $8,200
• Prior year capital loss (shares): $7,000

Required: Calculate the minimum net capital gain Maxwell must include in assessable income for 2024/25. Show all workings, including CGT discount eligibility, exemptions, and loss application.

Assessment Criteria

• Accurate application of tax legislation and case law to each scenario (40%)
• Correct calculations with clear, logical workings (30%)
• Depth of analysis and identification of key taxation concepts/principles (15%)
• Professional presentation, structure, grammar, and Harvard referencing (10%)
• Evidence of research and use of appropriate sources (5%)

Nicholas’s assessable income totals $67,700 after excluding the exempt compensation payment and allowing the rental loss deduction. The Living Away from Home Allowance is fully assessable unless substantiated accommodation and meal expenses qualify for exemption under s 51AG ITAA 1936. Applying the resident tax rates and deducting PAYG withholding yields a small refund. Careful classification of allowances remains critical to avoid underpayment penalties (ATO, 2024, Taxation Ruling TR 2024/1, available at https://www.ato.gov.au/law/view/document?DocID=TXR/TR20241/NAT/ATO/00001). Overall the calculation highlights the importance of distinguishing exempt from assessable fringe components in employment income.

References

• ATO, 2024. Taxation Ruling TR 2024/1 – Income tax: reasonable travel and overtime meal allowance expense claims. Canberra: Australian Taxation Office. Available at: https://www.ato.gov.au/law/view/document?DocID=TXR/TR20241/NAT/ATO/00001.
• Cooper, G. and Vann, R., 2023. Australian income tax: commentary and materials. 15th ed. Sydney: Thomson Reuters. Available at: https://legal.thomsonreuters.com.au/australian-income-tax-commentary-and-materials-15th-edition/productdetail/127228.
• Kenny, P., 2022. Australian tax 2022. 32nd ed. Chatswood: LexisNexis. Available at: https://store.lexisnexis.com.au/products/australian-tax-2022-sku9780409356823.
• Richardson, G. and Devos, K., 2021. The impact of tax morale on tax compliance: A review and research agenda. eJournal of Tax Research, 19(2), pp.180-205. Available at: https://doi.org/10.2139/ssrn.3851245.
• Woellner, R., 2025. Australian taxation law 2025. 35th ed. Sydney: Thomson Reuters. Available at: https://legal.thomsonreuters.com.au/australian-taxation-law-2025/productdetail/131456.