Calculate grossed up taxable value of each fringe benefit

Reference no: EM133608066

Problem

Trang is employed as a trainee accountant for a large retail firm, Miyer Ltd. The retail firm sells a selection of goods, including clothing wear and accessories. During the current fringe benefits tax year, Miyer Ltd provided the following items as part of a salary package:

1. A car, mainly used to drive her children to school. The car was purchased for $25,000 (including goods and services tax). During the year, the car travelled 15,000 km, of which 3,000 km was work related. Licence, insurance and services cost $2,200. Trang contributes $1,170 to cover the cost of petrol.

2. Miyer Ltd gave Trang a selection of designer clothes with a retail value of $6,500. The goods cost Miyer Ltd $4,900.

3. Paid for her mobile phone bill of $890. Trang estimated that 70% of the phone calls were used to call her relatives and friends.

Task

Advise Miyer Ltd of the fringe benefit tax and income tax implications that may arise in relation to each of the items provided to Trang. Calculate the grossed up taxable value of each fringe benefit provided, and the total fringe benefits tax liability. You may assume all benefits were provided on 1 April 2023. Support your answer with relevant case law and legislation and show any relevant calculations.

Reference no: EM133608066

Questions Cloud

Calculate the net income of the nadine family trust : Calculate the net income of the Nadine Family Trust for this income year. Advise Nadine as to how she can distribute the net income in most tax-effective way.

How much will cory owe for this encounter : Cory Allen's insurance was billed $150.00 and the participating insurance allowed $125.00. Cory has a 90/10 co-insurance, so how much will Cory owe

How much will tammy owe for the visit : deductible and the PAR insurance allowed amount is $125.00 for last month's office visit. How much will Tammy owe for the visit

What amount should houston report as retained earnings : For the two months ended February 28, Y4, Houston reported a net loss of $ 20,000. What amount should Houston report as retained earnings at February 28, Y4

Calculate grossed up taxable value of each fringe benefit : Calculate the grossed up taxable value of each fringe benefit provided, and the total fringe benefits tax liability.

How many would you expect to pay with a debit : If next week, he is expecting 1500 customers, about how many would you expect to pay with a debit

Claim a higher current deduction for losses : Claim a higher current deduction for losses is to: (1) take withdrawals from the activity and (2) reduce the activity's recourse debt, thereby reducing

Recommend estate planning strategy consistent with tax codes : Recommend estate planning strategies consistent with tax codes and regulations for the purpose of reducing the taxable estate.

Determine karlas maximum rrsp deduction : Determine Karla's maximum RRSP deduction for 2022. Determine the Part X.1 penalty tax (ITA 204.1) (excess RSP contributions) that would be assessed to Karla.

User Account

All Pages