• Hardwood Forest Pty Ltd was incorporated to undertake a hardwood forest business venture in the Adelaide Hills. It acquired some land at a cost of $1million and planted 50,000 hardwood tree plants at a cost of $1million. The business carried on by the company involves buying and planting seedlings, attending to growing them, cutting down the trees grown, and the sale of timber produced from the

It is some years later and Hardwood Forest Pty Ltd has decided to expand its business venture and needs funds for the expansion. To this end, it agrees to enter into a partnership with Green Investments Pty Ltd, which pays Hardwood Forest Pty Ltd

$2million in return for Hardwood Forest Pty Ltd selling it a 25% interest in the expanded venture. The $2million received by Hardwood Forest Pty Ltd is to be retained within the new partnership, as an additional capital contribution by Hardwood Forest Pty Ltd, and is to be used to fund the expanded business venture.

The transaction results in Hardwood Forest Pty Ltd realising property consisting of an interest in its land and growing trees. This is the first time it has entered into this type of transaction, which was not expected by Hardwood Forest Pty Ltd when it bought its land, and it does not expect to realise again in this way any more of its property.

• Discuss whether or not the following receipts would be included in the assessable income of the recipient under s6-5(1):

• An amount of $10,000 received as a lump sum by a beneficiary as a gift under a Will of a deceased

• An amount of $2,000 a year received over a 5 year period by a beneficiary as a gift under a Will of a deceased

• A prize of $100,000 received by a contestant on the television show “Sale of the Decade” who regularly appears on such shows, but who has never previously won a

• A prize consisting of a Smart Ultra HD LED TV worth $1,000 received by a customer of a DVD hire shop business. The prize was awarded to the customer by a movie company for the customer being judged in a competition as having drawn the best poster advertising an up-coming movie

• A prize consisting of a Smart Ultra HD LED TV worth $1,000 received by the sole proprietor of a DVD hire shop business. The prize was awarded to the

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shop proprietor by a movie company for being judged in a competition as having the best in-shop display of an up-coming movie release.

• A prize consisting of the benefit of a non-transferable and non-cash redeemable holiday to the Gold Coast awarded to a self-employed abalone fisherman who sells abalone to a seafood company. The prize benefit was awarded on the fisherman meeting an allotted target sales quota for abalone sold by him to the seafood

• Compensation payments of $1,000 a week paid under the Return to Work Act 2014 (SA) that are received by an injured employee who has suffered a work injury that results in incapacity for

• A lump sum compensation payment of $5,000 received under a home contents insurance policy to compensate for household goods that were destroyed in a fire.

• A lump sum compensation payment received by a distribution company under a contract that cancels an agency agreement 5 years before its expiration date, resulting in the company relinquishing a substantial part of its business income. The company has never previously had an agency agreement cancelled.