Question 1 (10 Marks) Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates...

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Question 1 (10 Marks) Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates around Mt Hotham in Victoria. On 1 May 2019, Perisher provided Nikita (one of its employees) with a car as Nikita does a lot of travelling for work purposes. However, Nikita’s usage of the car is not restricted to work only. Perisher purchased the car on that date for $44,000 (including GST) plus $2,000 (including GST) dealer delivery charges. For the period of 1 May 2019 to 31 March 2020, Nikita travelled 12,000 kilometers in the car and incurred expenses of $770 on minor repairs that have been reimbursed by Perisher. The car was not used for 10 days when Nikita was interstate and was parked at the airport and for another five days when the car was scheduled for annual repairs. Calculate the Fringe Benefits Tax Liability for Perisher, please have a look at the matrix below on how to answer the question QUESTION 1: Calculate the FBT liability for Perisher Pty Ltd Weighting Identification of material facts (issues) regarding fringe benefits provided to Nikita 1 % Identification and analysis of legal issues / legal question and relevant taxation law in regards to fringe benefits (e.g. FBTAA 1986). 1 % Thorough application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Perisher’s case. 1 % Accurate conclusion of the FBT calculation. 5 % Correct information and taxation law have been used and properly cited. A detailed analysis has been performed. 2 % QUESTION 1 TOTAL MARKS: 10 % HI6028 Taxation Theory, Practice and Law Individual Assignment T2.2020 4QUESTION 2 - (15 MARKS) Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of the following assets: 1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August 1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,000 2. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’st January 2015 for the amount of $20,000 3. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought it second hand on 10’th October 2018 for $350. 4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August 2018 5. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 Advise the Capital Gain Tax Consequences for the above transactions, please have a look at the matrix below on how to answer the question QUESTION 2: Capital gain tax consequences Weighting Identification of material facts on regard to each case 2 % Identification and analysis of legal issues / legal question and relevant taxation law for each case. 2 % Thorough application of ITAA 1997 to material facts. 2 % Accurate conclusions are reached from each case. 6 % Correct information and taxation law have been used and properly cited. A detailed analysis has been performed. 3 % QUESTION 2 TOTAL MARKS: 15 %

hi6028-1-individual-assignment-t1-20202-q25hgtwn-onquqhun.pdf

Soumyadeep · Accepted Answer

HI6028: TAXATION THEORY, PRACTICE & LAW 
Case Studies of Fringe Benefits Tax and Capital Gain Tax
Author Name
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Table of Contents
Question 1	2
Question 2	5
References	7
Question 1
Identification of material facts (issues) regarding fringe benefits provided to Nikita
Fringe benefits are benefits in addition to the compensation paid by employers to employees. Common fringe benefits include life insurance, medical insurance, company owned vehicles, stock options etc. A car fringe benefit generally arises where the employer makes the car it holds available for an employee’s private use or the car is regarded as being available. 
In our case, the employer Perisher Pvt Ltd has given a car to one of its employees, Nikita, as she is involved in a lot of travelling purposes for her job. But the usage of the car is not restricted to only Nikita’s job related travelling purposes. So the material facts or issues regarding fringe benefits to Nikita is to calculate the Fringe Benefit Tax Liability for Perisher Pvt Ltd, using an appropriate valuation method and calculate the taxable value. 
Identification and analysis of legal issues / legal question and relevant taxation law in regards to fringe benefits
According to FBTAA 1986, a car fringe benefit arises when:
at any time on a day, in respect of the employment of an employee, a car held by a person is made available or actually applied for the private use of an employee or his associate. That availability or application of the car can be considered as a benefit provided by the employer on that day to the employee or his associate with regards to the employee’s employment.
Legal issues or questions to be considered in this case are:
· Amount of fringe benefit given to employee
· Application or availability of the vehicle for private use
· Application for work use
· Fringe Benefit Tax Liability
Application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Perisher’s case.
Under ITAA 1936 sect 51AGA, 
A deduction is not allowable to an employee with regards to the expenditure to the degree it has been incurred with regards of the provision of car parking facilities for a car if 
a. On that day, the employee has a primary place of employment 
b. The car is parked for more than 4 hours at or near the primary place of employment
c. The expenses are in regards with the provision of parking facilities
d. The car was used for travel between the employee’s residence and employment’ primary place
With regards to Fringe Benefit Tax, a car benefit is an exempt benefit if the provider cannot deduct any amount under section 86-60 of the ITAA 1997.  This section limits the degree to which deductions can be made by a personal services entity, with deductions not permitted for more than one car dedicated for private usage. As the entity does not have the right to claim any income tax deductions for these cars, this is an exempt benefit.

Question 1 (10 Marks) Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates around Mt Hotham in Victoria. On 1 May 2019, Perisher provided Nikita (one of its employees) with a car...

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