Essay ACTY6210: Taxation – Jason Case Study – New Zealand Tax Legislation – Law Assignment Help

Assignment Task:

Learning outcomes covered in this assignment 

Lo2. Apply New Zealand tax legislation to income and deductions 

Lo3. Determine New Zealand tax obligations relating to individuals, partnerships, trusts, and companies 

Question 1: 

Jason Law was offered an opportunity to study for a Master degree at Massachusetts Institute of Technology in the United States. He left New Zealand on 8 July 2018. Jason grew up in Napier and he moved to Auckland to study at the University of Auckland in 2014. He worked for a software development company in Auckland after graduating from the university. He had been living in a rented apartment until he left New Zealand. Jason resigned from his job, terminated his lease and stored his personal effects at his parents’ home in Napier before he left to the United States. Jason plans to find a job in the United States after he completes his Master degree study, but might come back to New Zealand, if his plan does not go well. His parents are happy for him to stay at their home in Napier any time he wishes, if Jason wants to come back to New Zealand.  Jason cancelled his tennis club membership in Auckland prior to his departure. He keeps a  bank account in New Zealand with ANZ Bank and takes a contribution holiday on his  KiwiSaver account.  Jason has not come back to New Zealand since he left, but he plans to visit his parents and some Auckland friends in July 2020 during the school holiday. 

Required: 

Please advise Jason about his tax liabilities regarding his New Zealand and worldwide income. Your advice should include the following: 

a) Briefly discuss the different tax consequences of being a resident or a non-resident for tax purposes. 

b) Identify the two rules to determine a person’s tax residence.

c) Explain to Jason, by applying these two rules if he is liable to pay tax on his New Zealand and/or worldwide income for the year ended 31 March 2019. 

Question 2: 

Part A – income (ACTY6210 )

Kaia Tuhoe is seeking your advice for the tax treatment of the following payments she received during the year ending 31 March 2020. Explain to her whether each of the transaction is taxable. Support your opinion with statutory provisions and/or case law. Every transaction is worth 2 marks. 

1. A total amount of $26,500 salary she received from a restaurant at which she works part-time. 

2. $300 of tips given to her by the restaurant customers. 

3. A scholarship for being the outstanding Maori student of $2,000 she received from Unitec where she studies for a bachelor’s degree. 

4. Kaia sold her 1- bedroom unit in Mt Albert for $461,000. She bought the property in May 2018 for $450,200. Kaia has been living in the unit since she purchased it. She did not do any renovation or alterations to the property. 

5. Kaia spent $20 for an old gear clock at a garage sale. At the time, Kaia knew that the antique collectors would be willing to pay a significantly higher price for the clock. She sold the clock on an antique auction for $500. 

6. An interest payment of $380 received from ASB bank. 

7. A reimbursement of $22 she received from the Cancer Society for the bus fare incurred when she worked as a volunteer Daffodil Day street collector. 

Part B – Deduction (ACTY6210 )

For each of the costs listed below, explain whether it is tax-deductible. Provide a brief explanation and support your answers with statutory provisions and/or case law. Every question is worth 2 marks. 

Graeme Anderson runs a property management company – Property NZ Limited. The company has incurred the following costs during the year ending 31 March 2020: 

1. $56,000 rent paid for the office. The payment covers a 12-month period between 1 July 2019 and 30 June 2020. 

2. Salaries of $188,000 paid to the employees. 

3. A $40 parking infringement ticket while Graeme was inspecting a property that is managed by the company. 

4. Three new computers each worth $1,800 for the employees to use in the office. 

5. A paid insurance premium of $9,000 for the period from 1 January 2020 to 30 June 2020. 

6. Paid $ 8,000 for a Christmas function in a restaurant for all the employees. 

7. $ 9,200 paid for an advertisement on the radio station for 6 months from 1 January 2020  to 30 June 2020.