Assessable Income Periodicity Samples for Students †MyAssignmenthelp.

Question: Discuss about the Assessable Income Periodicity. Answer: Keily v FCT (1983) Issue: The current issue is based on the determination whether an age pension paid by the government in the hands of the receipts would be considered as the ordinary income. Rule: On applying the constructive receipt rule the pension is considered as the ordinary income since it is a regular anticipated income and reliant upon in the hands of the taxpayer. Considering the case of Anstis v FCT it was held by the court of law youth allowance that is paid by the government and received by the student would be regarded as the ordinary income. Application: As evident from the facts the taxpayer was the regular dependent upon the income therefore such government benefit is treated as ordinary income. However according to the judgement of the court law in the case of FCT v Dixon (1952) it not only applies to the government benefit it is also applicable to the non-government benefit. As stated under the subsection 6-5 (1) of the ITAA 1997 an amount of income would be considered as an assessable income if the income is according to the ordinary concept. Therefore, according to the judgement of the court of law it was held that pension is an ordinary income and it would be considered for assessment. Federal coke Co pty Ltd v FCT (1977): Issue: The current issue is based on the determination whether the sum received arise out of the business operations were in the nature of capital or not. Rule: Where a voluntary amount of payment that is made to the business in the identification of the previous service following the business relationship has ceased such kind of payment is considered as a mere gift (Coleman and Sadiq 2013). However, if it were found that after the cessation of business the payment made for compensating the loss for the capital asset then it would be treated as the capital receipt and would not be considered as assessable. Application: The taxpayer under Federal coke Co pty Ltd v FCT owns a subsidiary coal mining company. The taxpayer received a compensation of $1 million to the entirely owned subsidiary (federal coke) arising out of the variation in the long-term supply contract. The sum that was received by the taxpayer was not based on any anticipatory profits in future but the receipts of amount were as compensation for the loss of capital asset (Barkoczy 2016). Citing the reference of the California Copper Syndicate v Harris (1904) it was held that the receipts was regarded as capital receipts and would not be considered for assessment in the hands of subsidiary. Conclusion: A conclusion can be draw from this case that pension receipts will be considered as the amount that is assessable in accordance with the ordinary concepts. A conclusion can be drawn by stating that the receipts in the hands of Federal constituted the characteristics of income and not a capital. References: Barkoczy, S., 2016. Foundations of Taxation Law 2016.OUP Catalogue. Coleman, C. and Sadiq, K. (n.d.).(2013)Principles of taxation law. Kenny, P. (2013).Australian tax 2013. Chatswood, N.S.W.: LexisNexis Butterworths. Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016.OUP Catalogue.