ANSWERING TAX QUESTIONS
Taxation is a law course in which appropriate authority must be provided inanswering questions. Appropriate authority will consist of reference
代写英国留学生论文to the applicableprovisions of the relevant legislation and also to any supporting case law. In otherwords, reasons based in the law must be given in your answers. It is in the applicationof the law to the questions that you will earn your marks. Tax questions are intended
to test your understanding of the law; therefore an answer lacking the law, even ifcorrect, will not gain any marks. This applies to all questions, whether they are briefor long, or whether they are discussion questions or practical questions requiringcalculations.Please note you must use statute law and case law (the primary sources of the law) asyour authority, and not use references to secondary materials such as the textbookand the study guide. The textbook and the study guide should be used to lead you tothe law and to explain it, but your referencing should be confined to the law itself.In order to provide guidance as to how to answer tax questions, the following threeexamples of answers are provided to, respectively, a short question, a longer question
and a practical question. These are suggested answers used to demonstrate a suitableapproach involving the application of the law. Beyond these suggested answers forthe purpose of guidance, ‘model’ answers will not be provided for any questions intax courses.
Short question
Would weekly payments received from a sick and accident fund be assessable?
Suggested answer
It is assumed that payments from such a fund would be made to compensate for theloss of proceeds from business or from salary or wages as a result of sickness or anaccident suffered by the recipient.
In FCT v. Dixon (1952) 86 CLR 540 Justice Fullager held that the amount received astop up payments to replace lost salary took on the character of the payments that werereplaced (substitution principle). In our question the sickness and accident insurancepayments are a substitute for lost salary or lost business income. Salaries are derived
due to personal exertion and thus are ordinary income under s.6-5(1) (FCT v. Harris80 ATC 4238). Business receipts are derived from the carrying on of a business,another income earning activity (FCT v. Harris 80 ATC 4238). Therefore, applyingthe substitution principle on the authority of FCT v Dixon (1952) 86 CLR 540,payments made to replace a salary or business income are also ordinary income under
s.6-5(1).Therefore the payments received from a sick and accident fund are assessable asordinary income under s.6-5(1).
Comments on the answer
1. As it has not been made clear in the question just what a ‘sick and accident fund’is, an assumption has been made that it is to provide compensation for loss ofincome. This is a reasonable assumption, but it is important that it should be madeexplicit in the answer.
2. The case law authority has been given its full citation (names and reporterreference) in the answer. This would be appropriate in an
assignment answer (or ina tutorial answer) where you have time to provide this detail. However, in anexamination where time is limited, a simple reference to the name of the taxpayer,
ie Dixon, would be sufficient to identify the case.
3. The suggested answer is quite adequate for the question, particularly if only a briefanswer is called for. However, it does not necessarily
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