Week-09-2016澳洲税法.pptxVIP

TRADING STOCKChapter 18Foundations of Taxation LawGeneral treatment of trading stock[?18.1]Foundations of Taxation LawTrading stock is a revenue assetTrading stock transactions are therefore dealt with under the general tax rules:Proceeds from the sale of trading stock constitute ordinary income (assessable under s 6-5)Expenditure incurred in purchasing trading stock is an outgoing necessarily incurred in carrying on a business (deductible under s 8-1)Trading stock expressly deemed not to be of a capital nature (s 70-25)Interaction with other rulesCapital gains and losses made in relation to trading stock are disregarded for CGT purposes (s 118-25(1)) Deductions cannot be claimed under the capital allowance rules in respect of trading stock, as trading stock is not a depreciating asset (s 40-30(1)(b)) To the extent that an amount received by a taxpayer in respect of the sale of trading stock represents GST charged on a taxable supply, it is non-assessable non-exempt income (s 17-5)To the extent that an amount paid to acquire trading stock relates to an input tax credit, it is not deductible (s 27-5)[?18.3](c)Foundations of Taxation LawMeaning of trading stock[?18.2]Foundations of Taxation LawWhether an item is trading stock depends on the purpose for which it is held, not its underlying natureTrading stock includes:Anything produced, manufactured or acquired That is held for purposes of manufacture, sale or exchange In the ordinary course of businessTrading stock can include:Land held by a developerShares held by a share traderLive stock Accounting for trading stockTaxpayers must compare the value of their trading stock on hand at the start of the income year with their trading stock on hand at the end of the income yearExcess is assessableClosing stockOpening stockExcess is deductible Closing stockOpening stock[?18.4](a)Foundations of Taxation LawTrading stock on hand[?18.3](b)Foundations of Taxation LawExpenditure incurred in purchasing trading stock is deductible