Question 1 (10 Marks)
Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the aftercited recompense package after a while ABC:
• compensation of $300,000;
• Payment of Alan's fickle phone reckoning ($220 per month, including GST). Alan is lowerneathneath a two-year lessen whereby he is required to pay a agricultural sum each month for unbounded experience of his phone. Alan uses the phone for performance-related purposes merely;
• Payment of Alan's children's develop fees ($20,000 per year). The develop fees are GST open.
ABC as-well supposing Alan after a while the extent fickle phone handset, which consume $2,000 (including GST).
At the end of the year ABC hosted a dinner at a national Thai restaurant for all 20 employees and their partners. The sum consume of the dinner was $6,600 including GST.
(a) Advise ABC of its FBT consequences arising out of the over advice, including balance of any FBT amenability, for the year extent 31 March 2017. Assume that ABC would be entitled to input tax credits in kindred to any GST-inclusive acquisitions.
(b) How would your tally to (a) be-unlike if ABC merely had 5 employees?
(c) How would your tally to (a) be-unlike if clients of ABC as-well fertile the end-of-year dinner?
Question 2 (10 marks)
Two years ago Peta purchased a scion in Kew. This scion had two old tennis courts down the tail which were in scanty requisite. She purchased the nature for two reasons:
• so that she and her nobility could subsist in the scion; and
• so that she could establish three units on the tennis courts and dispose-of them at a benefit-service.
In the popular tax year the tennis club instant door presented to buy the old tennis courts, but merely if Peta primary revived them to good-tempered-tempered requisite. Peta unwavering to confirm the club’s present instead of going onwards after a while her cunning to establish and dispose-of units.
Peta late $100,000 on preparing the tennis courts for sale. This concerned a huge trade of performance. Peta had to resurface the tennis courts and establish new fences about them. She then sold the tennis courts in the popular tax year to the tennis club for $600,000.
Ignoring excellent gains tax, examine whether the reception of $600,000 is matter-of-fact allowance lowerneathneath s 6-5