Business Taxation

Assessment Task 1- Business Tax Outcome 1 consequence Study Badges of Trade There is no unbending definition of whether soul is conducting a business or non, it depends on a whole take off of factors which are go forthline in the badges of trade. There are 6 badges of trade which are intended to show if you are avocation or non so in target to charm if Ali is trading we come to look at these, and therefore check if he should charge for tax. Subject matter of the transaction If an plus is held for enjoyment or personal use then it is classed as an investment and not classed as trading, In Alis slick he is acquire elevator cars for re exchange and not for enjoyment or personal use, this would be classed as trading and therefore income earned ordain be root to tax. Length of ownership This relates to the length of date an plus is held for, if the summation is held for a short period of m then it is to a greater extent than believably to be cl assed as trading. As Ali barter fors cars to restore them it leave behind depend on the amount of yield that one car requires to the length of time he has the cars. frequency of transaction If a transaction is repeated of the same temperament i:e buying and considering cars then this would around likely augur trading.

Ali goes to the auction and buys a car and then returns to sell and purchase another, causing the frequency of transaction to be more than once, so again this would be treated as trading. Supplementary construct Work carried out on asset prior to sales agreement is a factor in find the existence of trade. In Alis case he pays! someone to carry out work in order to win a greater profit, this would be classed as trading. Circumstances of realisation This relates to the footing for sale and if the sale is pressure possibly due to cash-flow problems or it is each of a sudden then it is more than likely that this would not be classed as trading. Ali is certainly not forced to sell these cars all of a sudden therefore it would be classed as trading....If you want to get a full essay, order it on our website: BestEssayCheap.com

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