Amber owned and operated a boutique chocolate shop in Sydney that she purchased for $240,000 in August 2010. The purchase price consisted of equipment and stock worth $110,000 and the balance being goodwill. Following the birth of her child, Amber decided to sell the shop in February 2018 for $440,000 of which $280,000 was attributed to goodwill.
Amber was also required to sign a contract restricting her from opening another similar business within a 20km radius for the next 5 years. She received an additional sum of $50,000 for this contract.
Due to their expanding family, Amber and her husband purchased a four bedroom home in the outer suburbs of Sydney in June 2018. The purchase was partly funded by the sale of the business but also by the sale of Ambers one bedroom inner-city apartment. Amber had lived in the apartment since she inherited it from her Uncle in October 2013. He had purchased it in September 1992 for $180,000 and lived in it until he died. At the time of his death the apartment was valued at 5390,000. Amber signed a contract for the sale of the apartment in May 2018 for 5550,000 and settlement took place in July 2018.
Advise Amber of the taxation consequences of these transactions. You are not required to calculate any capital gains or losses. (20 marks)
Jamie is a real estate agent working for Houses R Us real estate. As part of his employment contract, Jamie receives a base salary of S50,000 per annum plus 10% of the agencys commission on sold properties where he has had a direct connection with the sale. He is also provided with a car, a Toyota Kluger costing S48,000. He is not required to contribute to the running costs of the car which total S13,500 per year and is allowed to use the car outside of work hours and on weekends.
Jamies salary package also includes a laptop which cost S2,300 and a mobile phone costing S1,200 per year. His employer also reimburses his annual professional subscription of S550 and provides him with an entertainment allowance of S2,000 per year.
Jamie was also lucky enough to achieve the highest sales for the previous six month period and was rewarded with a high tech home entertainment system worth S4,800.
`Houses R Us also offer their staff loans of up to S100,000 towards purchasing their own house at a rate of 4% per annum. Jamie is considering taking up this offer to purchase his first home.
Advise Jamie and Houses R Us of the taxation and FBT consequences of these transactions. You are not required to calculate any FBT liability.(15 marks)
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4. Names of cases or statutes should be italicised, and followed by the jurisdiction not in italics, for example: Acts Interpretation Act 1901. Note the abbreviation for Commonwealth is `Cth not `Cwlth.
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Question 1 Amber owned and operated a boutique chocolate shop in Sydney that she purchased for $240,000 in August 2010May 11, 2019 in Uncategorized