MLC301 Principles Of Income Tax Law - Assessment Questions

QUESTION 3. 14

Discuss the CGT implications of the following. Where the year is not mentioned, assume the current tax year.
(a) Richard was the star batsman in the Australian cricket team. On 1 March, an official from another country paid him $40 000 in exchange for him agreeing not to play for Australia for the next 3 years.
(b) Arthur Pty Ltd entered into a contract to purchase a convenience store (called ‘7-Plus’) on 29 October 1999 for $650 000. Solicitor fees were $10 000.
On 1 September a customer, tired of excessive prices charged by such stores, burnt down the shop. It was worthless afterwards. Arthur received $700 000 from insurance on 1 January.