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Advise eastpac ltd of liability for fbt for the period

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On 1 July 2018 Tom Marks, a computer consultant, received a $75,000 low interest loan from his employer, Eastpac Ltd, at a 2.8% rate of interest. He used $30,000 to buy a car, which, on the basis of his log books, is used 50% for business. The remaining $45,000 was used for an extension to his house.

  • Tom also received an entertainment allowance of $1,000 per quarter, and Eastpac paid his professional subscriptions of $800. Tom as also provided with a mobile phone $250 and laptop computer $2390 which he used 90% for work purposes.

Problem 1: Advise Eastpac Ltd of their liability for FBT for the period ended 31 March 2019, and any income tax implications for Tom by showing all calculations and cite relevant legislation to support the above.

Reference no: EM132757246

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