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The short version
- Tax is a core subject, and it is a doing subject: you apply the rules to a scenario and show the numbers, you do not describe the law.
- It has two assessments, a written submission worth 40% and a final invigilated exam worth 60% that you have to pass on its own.
- The marks are spread across many small methods. Income tax and the reconciliation, capital gains, and the taxation of entities carry the most.
- Tax rates, thresholds and rules change every income year. Learn the method, and always apply the figures in force for the year you are tested on.
- Most lost marks are order and currency slips: capital losses applied after the discount, or a rate from the wrong year.
What you are up against
Tax rewards method over memory. You are not asked to recite a section number. You are handed a scenario and asked to work out the right number and show how you got there. The rules are detailed, but each one is a small, repeatable method, and the exam reuses the same methods on new facts. Learn the methods, drill them, and the marks follow.
Two things shape how you prepare. First, this is not an exam-only subject. The written submission is 40% of your mark and the exam is 60%, and both reward a clear calculation with the working shown. Second, and this is the one that catches people, tax moves. Rates, thresholds and rules change every income year, so a method you learned last year can give the wrong number this year. Learn the shape of each method, and apply the figures in force for the income year you are being tested on.
Where the marks sit
Tax spreads its marks across a lot of small topics, which is why it feels large. The trick is to see that a handful of areas come up the most and to give them your first and best hours.
Relative emphasis across the tax topics, based on the chapter structure and how often each area is tested. This is an illustration, not published exam data. Confirm the emphasis for your own sitting against the current subject outline.
Illustrative only. Every subject differs. This shows the shape of a typical weighting, not the marks for any specific exam.
The plan follows. Make the income tax reconciliation automatic first, because almost every scenario runs through it. Get capital gains and the entity rules solid next, because they carry marks and reward a clear order of steps. Then cover GST, fringe benefits and the international basics well, and give administration and anti-avoidance a lighter, confident pass.
The two assessments, and why both matter
Treat the submission and the exam as two tasks. The written submission comes at about the midpoint. You are given a scenario and asked to work through the tax treatment and set out your reasoning. It rewards a clear structure: name the issue, state the rule that applies, apply it to the facts, and show the number. A right figure with no working still loses marks, because the marker cannot see the method.
The exam is the final hurdle, worth 60%, and you have to pass it on its own to pass the subject. It runs for two and a half hours and asks you to apply the rules to fresh scenarios against the clock. The materials are built for an open-book sitting, so if that is how your exam runs, the win is not in what you can look up, it is in how fast you can find the right rate table and the right method. That is a preparation task, not an exam-day one.
Tip
Build a one-page reconciliation template you can run from memory: accounting profit at the top, a column for add-backs, a column for subtractions, then taxable income, tax, and offsets and credits. Most income tax questions are that template with different numbers.
The methods that come up again and again
Capital gains is the clearest example of a method that turns on order. You start with the gross gain, which is the proceeds less the cost base. Then you apply capital losses, current year first and then any carried forward. Only after that do you apply the discount, and only if the asset qualifies. The order is the whole game.
Exam trap
The classic capital gains slip is applying the discount before the losses, which inflates the loss offset and understates the tax. Losses come off the gross gain first, then the discount applies to what is left. Get that order right and the arithmetic is easy.
The entity rules are the next big earner, and they reward precision. A loan from a private company to a shareholder that is not properly documented is caught by the private-company loan rules and can be treated as a dividend. A fully franked dividend carries a franking credit set by the company tax rate that applies to that company, so a base rate entity franks at a lower rate than a large company. Trusts and partnerships pass their income through to the people behind them, so the question is usually who is assessed, not whether. None of this is hard once you have the method, but all of it punishes a guess.
Fringe benefits and depreciation round out the calculations you will meet often. A car fringe benefit can be valued two ways, a statutory method based on the base value and an operating cost method based on running costs and private use, and the answer often depends on which you are told to use. Depreciation has a prime cost method and a diminishing value method, and picking the wrong one changes the deduction. In every case the rule is the same: read which method the question wants, then run it.
The topics that decide your result
How to study this subject
Tax is a doing subject. You cannot read it into place, because neither assessment asks you to recall a rule in the abstract. They hand you facts and ask for a number. So study with problems in front of you from the start.
Make a one-page method for each big topic: the reconciliation on one page, the capital gains order on another, the entity rules on a third. Then work questions against those pages until you no longer need them, and always write the working, because the method marks are given for the steps even when the final figure is off. If your exam is open-book, spend an hour tabbing your rate tables and method pages so you can reach them in seconds. The candidates who struggle in an open-book tax exam are the ones who planned to look everything up on the day.
Tip
Keep a live note of anything that carries a year or a figure, like a rate, a threshold or a discount percentage. Those are the parts most likely to have changed, and the parts a marker checks against the year you are being tested on.
Your Tax study checklist
0 of 8 doneWork top to bottom. The big methods come first for a reason. Progress saves in your browser.
Traps that cost easy marks
The four that catch people
Applying the discount before capital losses, which understates the tax. Using a rate or threshold from the wrong income year. Writing the final figure with no working, which throws away the method marks. And running the wrong method, like the statutory car benefit when the question wanted operating cost. Every one is an order, currency or reading slip, not a knowledge gap, so every one is preventable.
Tax rewards a clear method with the working shown. Learn the steps, apply the figures for the right year, and show every one.
Questions people ask about the Tax subject
- Is the Tax subject hard?
- It has a heavy reputation because the rules are detailed and there are a lot of them. The upside is that it rewards method. Each rule is a small, repeatable calculation, so once the big methods are automatic the subject becomes far more manageable.
- How is the subject assessed?
- There are two assessments: a written submission worth 40%, where you work through a scenario, and a final invigilated exam worth 60% that you have to pass on its own. Both reward a clear calculation with the working shown. Confirm the details against your current subject outline.
- Which topics are worth the most marks?
- The income tax reconciliation runs through almost everything, so start there. Capital gains and the taxation of entities are the next priorities. GST, fringe benefits and the international basics are reliable once those anchors are set.
- Do I need to memorise section numbers?
- No. You are tested on applying the rules to facts, not reciting the law. What you need is a reliable method for each big topic and the current figures. If your exam is open-book, a fast index of your rate tables matters more than memorising them.
- The rates in my materials look different. Which do I use?
- Always the figures in force for the income year you are being tested on. Rates and thresholds change most years, so treat any rate, threshold or percentage as the thing to check against the current subject outline rather than trusting older notes.
Want the methods already on a page?
Our Tax pack puts the reconciliation, the capital gains order and the entity rules on a page, with a cheat sheet built for an open-book sitting, practice questions and worked solutions. Your time goes on practice, not on making notes.
If this helped, three more will too. Start with how to find the topics that carry the marks to use the same weighting method on any subject, then how to read a question stem for the command verbs that decide what an answer needs, and the last seven days before your exam when the sitting is close.
