Effective date
Capital gain tax 20 Sept 1985
Rules limiting the deductibility of ENTERTAINMENT COST 1985
FBT 1986
S4-15: Taxable Income = Assessable income - Deductions
~ Assessable Income is made up of Ordinary Income and Statutory Income
S4-10: Tax Payable = (Taxable income x Tax rate schedule) - Tax offsets
Note:
S36-10: Tax loss when Deduction > Assessable Income
~~ not refunded
~~carried fwd against taxable income in the future (natural person, trustee and
companies)
~~ Partnership cannot carried fwd loses (distributed to partners according to profit
sharing ratio)
Tax loss = Deductions – Assessable Income - Net Exempt Income(if any)
S6-25: when an item potentially fall in both ordinary income (S6-5) and statutory income (S6-10) => follow Statutory income (prevail)
Eg. of Statutory income: p196
Sale of certain property – ss26(a), 25A and 26AAA & S15-15
Retirement payments – s26(d)
Employee benefits- S26(e)
Royalties- s26(f) & S15-20
Gain on Securities- S26BB
Convertibility ($)
Tennant v Smith (rent free accommodation) & Commr of Taxation & Cooke & Sherden (free holiday for successful operator)
- Income is what comes in, NOT what is saved from going out.
- A non-pecuniary (non-monetary) receipt can be converted into $ => income
- If non-pecuniary (non-monetary) receipt fail to converted into $ => not income
S26(e): If cannot convert into money, look at how much the taxpayer value it
(overcome Tennant v Smith)( employment relationship)
s26(e): does not apply to Cooke & Sherden because the taxpayers being contractor, NOT
EMPLOYEES (no employment relationship & ...