Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Law & Ethics Expert

Case study: Sue Lin was made redundant from her employment on 15 March 2009. She is motor car enthusiast, and so decided to take this opportunity to spoil her hobby. On 1 July 2008 Sue took out a bank loan of Rs750, 000 at the annual interest rate of 10%, rented a workshop for 12 months at a rent of Rs4, 000 month, and bought high precision equipment at a cost of Rs235, 000. On 10 July 2008 Sue bought four dilapidated motor cars for Rs80, 000 each. The restoration of the four motor cars was completed on 10 June 2009 at a cost Rs120, 000 each motor car. Sue immediately sold all of the motor cars for a total of Rs2, 000,000 - Sue was then offered employment elsewhere in the country beginning on 1 July 2009. She therefore sold the equipment for Rs150, 000 on 20 June 2009, repaid bank loan on 30 June 2009.

As she has just been indulging her hobby, Sue thinks that the disposal of the motorcars throughout the tax year 2008/9 should be exempt from tax. Sue has done some research on the Internet and has discovered that whether or not she is treated as carrying on a trade will be determined according to the 'badges of trade':

Sue had no other income throughout the tax year 2008/9 except as indicated above and was entitled to deductions in respect of 3 dependents.

Required:

(a) List out the nine badges of trade and briefly describe the meaning of each of the ‘badges of trade' listed. You are not anticipated to quote from decided cases.

(b) Briefly describe why Sue is likely to be treated as carrying on a trade in respect of her motor car activities.

(c) Evaluate Sue's income tax liability for tax year 2008/9, if she is treated as carrying on a trade in respect of her motor car activities.

Business Law & Ethics, Finance

  • Category:- Business Law & Ethics
  • Reference No.:- M94543

Have any Question? 


Related Questions in Business Law & Ethics

Business law exam1 the new city council recently passed an

Business Law Exam 1) The New City council recently passed an ordinance revising the hiring criteria for public transportation workers. The criteria apply to those who operate and maintain public transportation equipment, ...

Introduction to us legal systems final examyou must answer

INTRODUCTION TO US LEGAL SYSTEMS FINAL EXAM You must answer BOTH questions below: 1) Describe and discuss the various roles of the judge, jury, and attorneys in the U.S. litigation system. 2) Discuss and analyze in detai ...

Question 1 the seller can recover the purchase price for

Question 1 The seller can recover the purchase price for the goods only under certain circumstances, including when: The buyer accepts, but fails to pay for the goods. The goods are destroyed after risk of loss passes to ...

Discussion response at least 275 words to the message below

Discussion response at least 275 words to the message below including cited information and any information to support your response. Where does court consolidation differ from court restructuring? How does court consoli ...

Choose 6 six of the following questions and answer each

Choose 6 (six) of the following questions and answer each thoroughly. Each essay question is worth 5 (five) points each. 1. Explain the links between evolution, gender, and crime. 2. Identify and discuss the mental disor ...

Law intentional tortsken hates len one day ken sees len

Law Intentional Torts Ken hates Len. One day Ken sees Len riding his horse on the Bridle Path. Ken runs up to Len and kicks Lens horse in the leg. Discuss Ken's liability to Len, if any, for any intentional torts.

Attn lady taylor phd employment law reportpurpose of

ATTN: Lady Taylor PhD (Employment Law Report) Purpose of Assignment The purpose of this assignment is to increase learners' comprehension of human resources management, laws governing employment, and trends shaping human ...

Assignment1warranty review assignment find a warranty

Assignment 1. Warranty Review Assignment. Find a "warranty" pertaining to the sale of goods. Normally, these are included in the boxes containing electronic devices, home appliances, and electrical tools. You can also fi ...

Combine your knowledge gained from materials in this class

Combine your knowledge gained from materials in this class with outside research regarding fraud liability and remedies and discuss the rules for fraud liability and the potential remedies. Consider the different scenari ...

Write 2 pages on ethics and is a case studysource to be

Write 2 pages on Ethics and is a case study. Source to be used for paper Thiroux, J. P., Krasemann, K. W. (2014-12-01). Ethics: Theory and Practice (Updated Edition), 11th Edition. Conflict Resolution Paper Assignment 1. ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro