Integrated Tax Planning and Whole-Course Problem Solving
Model Answers
Question 1 — Entity choice
Identify the individual/company/trust taxpayers, current and future tax rates, PSI risk, business income/deductions, losses, remuneration/distribution methods, Division 7A exposure for a company, trust distribution/s100A issues for a trust, CGT discount/concession access, GST/FBT/super obligations, asset protection, compliance cost, succession and exit. The tax answer must be integrated with the commercial objective.
Question 2 — Business sale
At minimum: characterise proceeds between goodwill/CGT assets and depreciating assets; calculate balancing adjustments; consider GST including going-concern treatment; determine company taxable income/rate; characterise repayment of the genuine shareholder loan; analyse the later shareholder distribution under dividend/imputation or capital rules; and consider Division 7A if value moved privately before formal distribution.
Question 3 — Employee/shareholder
Salary: employment income, company deduction/PAYG/super. Company car: FBT. Low-interest private-company loan: Division 7A and possibly other benefit issues. Franked dividend: Divisions 202–207 imputation. The same individual has different legal capacities, so each benefit follows a different regime.
Question 4 — Property transaction
Determine whether development profit is ordinary income or capital (usually revenue in a genuine development business), characterise land and project costs, apply GST to sales of new residential premises and consider margin scheme eligibility, calculate trust s95 net income and beneficiary/trustee assessment, stream any relevant capital/franked amounts if applicable, and trace interest/finance deductions and related-party dealings.
Question 5 — Restructure
Identify the assets and existing tax bases; compare Division 122 or Subdivision 328-G rollover routes as appropriate; test SBE/aggregated turnover and genuine-restructure requirements; examine GST going-concern/rollover interactions; identify future company rate, imputation and Division 7A consequences; then model the investor admission and future exit.
Question 6 — Final advice
An exam conclusion states the most likely legal result and qualifications on the assumed facts. Professional advice must also identify missing facts, evidence, deadlines, elections, documents, cash-flow consequences, alternative structures, commercial risk and the next action the client should take.