Acct1018Tutorial Submission Question 10

FINANCIAL PLANNING

SUBMISSION :9 (DUE: COMMENCEMENT WEEK THIRTEEN MONDAY 9 AM)-SOLUTIONS

INSTRUCTIONS / PENALTIES

Work needs to be submitted by the DUE / DATE TIME via the course web site as detailed above in your own hand writing (see course guide for details). Students may submit multiple times with the latest submission prior to the deadline being the work potentially marked.

Submissions need to be your OWN work

Submissions needed scanned or photographed and need to be CLEARLY LEGIBLE when submitted electronically.

Work electronically submitted for any particular week will be worked through in your respective tutorials that week together with student queries relating to the topic area. Students should bring a copy of their submission to update in the tutorial as a means of gaining the solution. (Copies of solutions will not be provided in hard copy form so it is imperative you attend tutorials)

Penalties and non-acceptance of your submission apply if you fail to meet the above requirements

QUESTION ONE

Summarise the principal capital gains tax (CGT) considerations in the event of death.

(max words 200) (5 marks)

Answer:

In broad terms, the relevant CGT considerations in the event of death are to determine:

• when the relevant assets were acquired by the deceased;

• when the relevant assets were disposed of by the executor/beneficiary; and

• who will be subject to the CGT imposed.

The relevant date of acquisition by the deceased determines the date of acquisition by the executor/beneficiary as well as the method used to calculate the cost base (actual cost, indexed cost or market value) of the relevant asset. The disposal date is important as this will allow for the assessment of whether the CGT concessions (indexation and/or discount method) will apply to the taxable amount. The party liable for the CGT obviously needs to be informed of this so that appropriate provision for the tax payment...