Advise Periwinkle of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2016. You may assume that Periwinkle would be entitled to input tax credits in relation to any GSTinclusive acquisitions.
HI6028 Taxation, Theory, Practice &
Law
T2 2016 ASSIGNMENT 2
Due date: Week 10
Maximum marks: 20 (20%)
Instructions:
This assignment is to be submitted by the due date in both
soft-copy (Safeassign – Bb) and hard copy.
The assignment is to be submitted in accordance with
assessment policy stated in the Subject Outline and Student
Handbook.
It is the responsibility of the student submitting the work
to ensure that the work is in fact his/her own work. Ensure that
when incorporating the works of others into your submission that it
appropriately acknowledged.
Case study 1: Capital Gains Tax
Fred is a resident who signed a contract to sell his holiday
home in the Blue Mountains in August last year. The sale was
settled in February this year when Fred received $800,000 from the
purchaser. Fred incurred legal fees of $1100 (Inclusive of GST) and
real estate agent’s commission of $9,900 (Inclusive of GST) in
relation to the sale. Fred purchased the holiday home in March 1987
for $100,000 and paid $2,000in stamp duty on the transfer and $1000
in legal fees. In January 1990, Fred engaged a builder to build a
garage on the property for $20,000,
Calculate Fred’s net capital gain for the current year.
Assume he also has a net capital loss from last year of $10,000
arising from the sale of shares.
Would your answer be different if the loss arose from the
sale of an antique vase?
(10 marks, max. 1000 words).
Case study 2: Fringe Benefits Tax
Periwinkle Pty Ltd (Periwinkle) is a bathtub manufacturer
which sells bathtubs directly to the public. On 1 May 2015,
Periwinkle provided one of its employees, Emma, with a car as Emma
does a lot of travelling for work purposes. However, Emma’s usage
of the car is not restricted to work only. Periwinkle purchased the
car on that date for $33,000 (including GST).
For the period 1 May 2015 to 31 March 2016, Emma travelled
10,000 kilometres in the car and incurred expenses of $550
(including GST) on minor repairs that have been reimbursed by
Periwinkle. The car was not used for 10 days when Emma was
interstate and the car was parked at the airport and for another
five days when the car was scheduled for annual repairs.
On 1 September 2015, Periwinkle provided Emma with a loan of
$500,000 at an interest rate of 4.45%. Emma used $450,000 of the
loan to purchase a holiday home and lent the remaining $50,000 to
her husband (interest free) to purchase shares in Telstra. Interest
on a loan to purchase private assets is not deductible while
interest on a loan to purchase income-producing assets is
deductible.
During the year, Emma purchased a bathtub manufactured by
Periwinkle for $1,300. The bathtub only cost Periwinkle $700 to
manufacture and is sold to the general public for $2,600.
(a) Advise Periwinkle of its FBT consequences arising out of
the above information, including calculation of any FBT liability,
for the year ending 31 March 2016. You may assume that Periwinkle
would be entitled to input tax credits in relation to any
GSTinclusive acquisitions.
(b) How would your answer to (a) differ if Emma used the
$50,000 to purchase the shares herself, instead of lending it to
her husband?
(10 marks, max. 1000 words)
. WITH BEST NURSING TUTORS TODAY AND
GET AN AMAZING DISCOUNT
The post Advise Periwinkle of its FBT consequences arising out
of the above information, including calculation of any FBT
liability, for the year ending 31 March 2016. You may assume that
Periwinkle would be entitled to input tax credits in relation to
any GSTinclusive acquisitions. appeared first on BEST NURSING
TUTORS . NB: We do not resell papers. Upon ordering, we do an original
paper exclusively for you.
The post Advise Periwinkle of its FBT consequences arising out
of the above information, including calculation of any FBT
liability, for the year ending 31 March 2016. You may assume that
Periwinkle would be entitled to input tax credits in relation to
any GSTinclusive acquisitions. appeared first on The Nursing
Hub.
Other samples, services and questions:
When you use PaperHelp, you save one valuable — TIME
You can spend it for more important things than paper writing.
