Preventive Business Relations Contractual †Myassignmenthelp.Com

Question: Discuss About The Preventive Business Relations Contractual? Answer: Introducation The issue in this problem deals with the deductibility of those expenditures, which occur at the end of business in general. The section answers to the query regarding the allowance of the taxpayer to receive deductions in the legal expenditures that are incurred after the termination of a business, in agreement with section 8-1 of the Income Tax Assessment Act 1997[1]. Section 8-1 of the Income Tax Assessment Act 1997[2] Taxation Income ID 2003/210 Placer Pacific Management Pty Ltd v. FC of T95 ATC 4459; (1995) 31 ATR 253 AGC (Advances) Ltd v. Federal Commissioner of Taxation(1975) The Taxation Income ID 2003/210, has the imperative decisions included in it, which deals with the deductions entitlements regarding the legal expenditures which occurs at the termination of any kind of business activities, which are stated under section 8-1 of the Income Tax Assessment Act 1997[3]. According to the taxation ruling, defined under the concerned section, the taxpayers should be entitled to receive allowable deductions in the legal expenses, which they incur at the end of their business activities, because the expenses are occurring after the termination of the business activities[4]. In the concerned case study, the taxpayer taken to be Waterside Pty Ltd operated a shipbuilding business in Brisbane, which they decided to stop shortly before the Christmas. The reason behind their cessation of their business activities is the onset of a recessionary situation. The new company, Waterside Investment Private Limited was formed shortly after the disposal of the previous assets. The new company compensated the workers for settlement after the parent company winded up. The case of the Placer Pacific Management Pty Ltd v. FC of T95 ATC 4459; (1995) 31 ATR 253, shows that the taxpayer involved in this case was a conveyor belt produces, who decided to sell the business to another party. The contract being of selling a portion, the company still handled the repairing activities, which originated from the system set up before the company was sold to another party[5]. The Federal Court referred to the verdict that was passed in the case of AGC (Advances) Ltd v. Federal Commissioner of Taxation(1975), to consider the allowable deductions for legal expenditures and then the court passed the verdict collectively. In this scenario, the expenses, which occurred in the last part of the year, were not considered to be included in the issue of the deductibility entitlement[6]. In the present case, the claim for compensation was in the outgoing form after the wind up of the parent business. Therefore, as suggested under the subsection 8-1 of the ITAA 1997, the company, Waterside Investment Private Limited, should be eligible to claim the deductions for the compensations, which were done to settle the payments of the winded up company[7]. Conclusion: The legal expenditures, as seen in this scenario, shall be taken to be eligible to deductions as the expenditures were incurred for settling the claims for the cessation of the business of the parent company. References Alstadster, Annette, and Martin Jacob. "The effect of awareness and incentives on tax evasion." (2013). Anderson, Colin, and Catherine Brown. "Mind the Insolvency gap: Lessons to be learned from audit expectations gap theory."Insolvency Law Journal22.4 (2014): 178-191. ato.gov.au, 'Home Page' (Ato.gov.au, 2017) https://www.ato.gov.au/ accessed 13 September 2017 Braithwaite, Valerie, ed.Taxing democracy: Understanding tax avoidance and evasion. Routledge, 2017. Brown, Christine, and Kevin Davis. "Taxes, tenders and the design of Australian off?market share repurchases."Accounting Finance52.s1 (2012): 109-135. Figot, Bryce. "Self-managed super: Deductible personal contributions: A critical trap!."Professional Planner72 (2015): 32. Jorgensen, Ron. "Division 7A structuring: The contortionist revisited."Tax Specialist20.3 (2017): 118. King, Margot. "Offshore hubs: Developments in multinational corporate tax anti-avoidance."Australian Resources and Energy Law Journal35.2 (2016): 142. Law.ato.gov.au, 'ATO ID 2003/1027 - Whether A Foreign Government Can Be Characterised As A 'Company' Where It Owns An Australian Resident Company That Carries On Commercia [1] ato.gov.au, 'Home Page' (Ato.gov.au, 2017) https://www.ato.gov.au/ accessed 13 September 2017 [2] ato.gov.au, 'Home Page' (Ato.gov.au, 2017) https://www.ato.gov.au/ accessed 13 September 2017 [3] Law.ato.gov.au, 'ATO ID 2003/1027 - Whether A Foreign Government Can Be Characterised As A 'Company' Where It Owns An Australian Resident Company That Carries On Commercial Activities In Australia' (Law.ato.gov.au, 2017) https://law.ato.gov.au/atolaw/view.htm?docid=AID/AID20031027/00001 accessed 13 September 2017 [4] Lignier, Philip, and Chris Evans. "The rise and rise of tax compliance costs for the small business sector in Australia." (2012). [5] Somers, Renuka, and Ashleigh Eynaud. "A matter of trusts: The ATO's proposed treatment of unpaid present entitlements: Part 2."Taxation in Australia50.3 (2015): 147. [6] King, Margot. "Offshore hubs: Developments in multinational corporate tax anti-avoidance."Australian Resources and Energy Law Journal35.2 (2016): 142. [7] Brown, Christine, and Kevin Davis. "Taxes, tenders and the design of Australian off?market share repurchases."Accounting Finance52.s1 (2012): 109-135.