Robert and Rose Mathieson are the joint owners of a business called…

Question Answered step-by-step Robert and Rose Mathieson are the joint owners of a business called… Robert and Rose Mathieson are the joint owners of a business called Kakudu Holiday Cabins (KHC). The business is located in the Kakudu National Park in the Northern Territory (Kakudu NP). KHC hires out fully catered luxury cabins to the general public during the Northern Territory dry season. KHC also conducts birdwatching tours in the Kakadu NP. The following provides additional information about the parties: 1. For the period 1 May 2018 to 30 November 2018, KHC derived $500,000 in accommodation fees and $200,000 for restaurant revenue. The operation of KHC’s birdwatching tours is subcontracted to another company, BirdWatch Tours (BirdWatch). 2. Assume Robert is an Australian resident and Rose is a non-resident of Australia. 3. Rose is the songwriter for a number of well?known rock bands, including the Australian rock band JKLM. Agreement with BirdWatch The agreement between KHC and BirdWatch is due to end on 31 December 2022. Recently, complaints from customers have been received by KHC in relation to the quality of the tours provided by BirdWatch. The Department of Parks and Wildlife carried out an investigation of BirdWatch. As a result of the investigation, the Department of Parks and Wildlife suspended BirdWatch’s tour operator’s licence which meant BirdWatch stopped providing birdwatching tours. As a result, KHC terminated the contract with BirdWatch and launched legal action for loss of revenue sustained from the stoppage of the birdwatching tours. KHC’s claim was 4 settled for $400,000 on 21 November 2019 and they found another birdwatching tour operator three months later and re?started providing birdwatching tours. Agreement with Robert’s Brother Robert’s brother Greg is 22 years old and decided to take one year off after finishing his accounting degree at Canberra University. Greg establishes a crocodile hunting business providing services to a number of businesses involved in the tourism industry in the Kakudu NP (“Services”), including KHC. As payment for providing the Services to KHC, Greg is allowed to use one of its cabins for six months, valued at $40,000. Royalty Receipts Rose receives royalties of $3,000 per month relating to the use of her songs in Australia. As Rose lives overseas, each year, she often asks Robert’s friend Michelle to pay $34,000 as a lump sum to Rose and in return, Rose will assign the rights to the royalty payments from the publisher to Michelle. Michelle agreed to this arrangement on 1 July 2018, and Rose told Michelle to make the payment of $34,000 to her husband Robert. Required Using relevant legislation to explain your answer, explain to Robert Mathieson, Rose Mathieson and Greg Mathieson as to whether the above transactions constitutes assessable income. Law Social Science Tax law LAW 315 Share QuestionEmailCopy link Comments (0)