Advanced
Income Tax Law
Solutions
2018 Edition
Peter Baker
Geoff Cliff
Sonia Deaner
,Advanced Income Tax Law
Table of Contents Page No.
Chapter 1 Income of Minors 1
Chapter 2 Trusts 5
Chapter 3 Partnerships 25
Chapter 4 Companies 50
Chapter 5 Primary Producers 64
Chapter 6 Superannuation Funds 89
Chapter 7 Clubs, Societies and Associations 99
Chapter 8 Special Professionals 103
Chapter 9 Tax Agents 111
Chapter 10 Returns and Assessment 118
Chapter 11 Payment and Recovery of Tax 123
Chapter 12 Penalty Tax and Tax Offences 125
Chapter 13 Objections, Appeals and Reviews 133
Chapter 14 Tax Planning 136
Chapter 15 Personal Services Income 144
Chapter 16 International Taxation 149
Chapter 17 Fringe Benefits Tax 151
Chapter 18 Capital Gains - Special Topics 167
Chapter 19 Goods and Services Tax 174
Chapter 20 Tax Crime and Compliance Issues 178
Chapter 21 Electronic Lodgments 180
Chapter 22 Review Examinations 193
ISBN: 978 176 073 0031
Fifteenth Edition - January 2018
Published by National Core Accounting Publications
64 Parramatta Road
Forest Lodge NSW 2037
Phone: (02) 8039 5390
This book and any related publication are sold and distributed on the basis that the authors, consultants and editors:
Are not engaged in providing legal, financial, accounting, tax or any professional advice or service whatsoever.
Are not liable or responsible in any way for the result of any action or failure to act, which occurs on the basis
of the contents of this book or any related publication. This disclaimer expressly includes liability or
responsibility for errors or omissions.
The authors, consultants and editors urge that professional advice or service should always be sought in legal,
financial, accounting, tax or any other related areas.
This book and any other related publications are sold for educational and teaching purposes.
© This book is copyright and all rights are reserved. No part of this work is to be reproduced other than in
accordance with the Copyright Act, or with the written permission of the publishers. The Copyright Act 1968 of
Australia allows a maximum of one chapter or 10% of this book, whichever is the greater, to be copied by any
educational institution for its educational purposes provided that that educational institution (or the body that
administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act. For details of
the CAL licence for educational institutions contact: Copyright Agency Limited, telephone: (02) 9394 7600,
email:
II
, Advanced Income Tax Law
Income Tax Rates
2017/18 TAX RATES FOR RESIDENT INDIVIDUALS
Taxable Income Tax Rate
$ 0 to $ 18,200 Nil
$ 18,201 to $ 37,000 19c for each $1 over $18,200
$ 37,001 to $ 87,000 $3,572 plus 32.5c for each $1 over $37,000
$ 87,001 to $ 180,000 $19,822 plus 37c for each $1 over $87,000
$ 180,001 and over $54,232 plus 45c for each $1 over $180,000
Medicare Levy
For the year ended 30 June 2017, the Medicare Levy applied to individual taxpayers as
follows:
Taxable Income Rate of Medicare Levy
$0 to $21,655 0%
10% of the difference between taxable income and
$21,656 to $27,068
$21,655 (i.e. “shading-in”)
$27,069 and over 2% of taxable income
The Medicare Levy income thresholds for the 2017/18 income year were not available at the
time of publication of this textbook. These thresholds are expected to be announced in the
May 2018 Federal Budget.
Medicare Levy Surcharge
The 2017/18 thresholds are as follows:
No Tier Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001 - 105,000 $105,001 - 140,000 $140,001 or more
Families $180,000 or less $180,001 - 210,000 $210,001 - 280,000 $280,001 or more
MLS rate Nil 1% 1.25% 1.5%
The income thresholds for both singles and families increase by $1,500 for each MLS
dependent child excluding the first.
III
, Advanced Income Tax Law
Low Income tax offset
Taxable income Taxable income Taxable income
≤ $37,000 $37,001 to $66,666 ≥ $66,667
Maximum is reduced by 1.5
Tax offset up to maximum of
cents for each dollar in excess No tax offset
$445
of $37,000
Decline in Value – Small Business Entities
2017/18 income year
Depreciating Assets costing:
< $20,000 ≥ $20,000
Acquired Current Year:
Assets must be pooled as follows:
100% immediate deduction
GENERAL SMALL BUSINESS POOL
If acquired in a previous year and opening
adjustable value is < $20,000:
Acquired 2017/18 income year:
100% immediate deduction
Cost x 15% (no pro rata)
Acquired in a previous income year:
Pool opening balance x 30%
IV
Income Tax Law
Solutions
2018 Edition
Peter Baker
Geoff Cliff
Sonia Deaner
,Advanced Income Tax Law
Table of Contents Page No.
Chapter 1 Income of Minors 1
Chapter 2 Trusts 5
Chapter 3 Partnerships 25
Chapter 4 Companies 50
Chapter 5 Primary Producers 64
Chapter 6 Superannuation Funds 89
Chapter 7 Clubs, Societies and Associations 99
Chapter 8 Special Professionals 103
Chapter 9 Tax Agents 111
Chapter 10 Returns and Assessment 118
Chapter 11 Payment and Recovery of Tax 123
Chapter 12 Penalty Tax and Tax Offences 125
Chapter 13 Objections, Appeals and Reviews 133
Chapter 14 Tax Planning 136
Chapter 15 Personal Services Income 144
Chapter 16 International Taxation 149
Chapter 17 Fringe Benefits Tax 151
Chapter 18 Capital Gains - Special Topics 167
Chapter 19 Goods and Services Tax 174
Chapter 20 Tax Crime and Compliance Issues 178
Chapter 21 Electronic Lodgments 180
Chapter 22 Review Examinations 193
ISBN: 978 176 073 0031
Fifteenth Edition - January 2018
Published by National Core Accounting Publications
64 Parramatta Road
Forest Lodge NSW 2037
Phone: (02) 8039 5390
This book and any related publication are sold and distributed on the basis that the authors, consultants and editors:
Are not engaged in providing legal, financial, accounting, tax or any professional advice or service whatsoever.
Are not liable or responsible in any way for the result of any action or failure to act, which occurs on the basis
of the contents of this book or any related publication. This disclaimer expressly includes liability or
responsibility for errors or omissions.
The authors, consultants and editors urge that professional advice or service should always be sought in legal,
financial, accounting, tax or any other related areas.
This book and any other related publications are sold for educational and teaching purposes.
© This book is copyright and all rights are reserved. No part of this work is to be reproduced other than in
accordance with the Copyright Act, or with the written permission of the publishers. The Copyright Act 1968 of
Australia allows a maximum of one chapter or 10% of this book, whichever is the greater, to be copied by any
educational institution for its educational purposes provided that that educational institution (or the body that
administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act. For details of
the CAL licence for educational institutions contact: Copyright Agency Limited, telephone: (02) 9394 7600,
email:
II
, Advanced Income Tax Law
Income Tax Rates
2017/18 TAX RATES FOR RESIDENT INDIVIDUALS
Taxable Income Tax Rate
$ 0 to $ 18,200 Nil
$ 18,201 to $ 37,000 19c for each $1 over $18,200
$ 37,001 to $ 87,000 $3,572 plus 32.5c for each $1 over $37,000
$ 87,001 to $ 180,000 $19,822 plus 37c for each $1 over $87,000
$ 180,001 and over $54,232 plus 45c for each $1 over $180,000
Medicare Levy
For the year ended 30 June 2017, the Medicare Levy applied to individual taxpayers as
follows:
Taxable Income Rate of Medicare Levy
$0 to $21,655 0%
10% of the difference between taxable income and
$21,656 to $27,068
$21,655 (i.e. “shading-in”)
$27,069 and over 2% of taxable income
The Medicare Levy income thresholds for the 2017/18 income year were not available at the
time of publication of this textbook. These thresholds are expected to be announced in the
May 2018 Federal Budget.
Medicare Levy Surcharge
The 2017/18 thresholds are as follows:
No Tier Tier 1 Tier 2 Tier 3
Singles $90,000 or less $90,001 - 105,000 $105,001 - 140,000 $140,001 or more
Families $180,000 or less $180,001 - 210,000 $210,001 - 280,000 $280,001 or more
MLS rate Nil 1% 1.25% 1.5%
The income thresholds for both singles and families increase by $1,500 for each MLS
dependent child excluding the first.
III
, Advanced Income Tax Law
Low Income tax offset
Taxable income Taxable income Taxable income
≤ $37,000 $37,001 to $66,666 ≥ $66,667
Maximum is reduced by 1.5
Tax offset up to maximum of
cents for each dollar in excess No tax offset
$445
of $37,000
Decline in Value – Small Business Entities
2017/18 income year
Depreciating Assets costing:
< $20,000 ≥ $20,000
Acquired Current Year:
Assets must be pooled as follows:
100% immediate deduction
GENERAL SMALL BUSINESS POOL
If acquired in a previous year and opening
adjustable value is < $20,000:
Acquired 2017/18 income year:
100% immediate deduction
Cost x 15% (no pro rata)
Acquired in a previous income year:
Pool opening balance x 30%
IV
