Question 1 (10 Marks)
Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the aftercited recompense load delay ABC:
• salary of $300,000;
• Payment of Alan's inconstant phone score ($220 per month, including GST). Alan is beneath a
two-year retrench whereby he is required to pay a unroving sum each month for
unlimited manner of his phone. Alan uses the phone for product-related purposes barely;
• Payment of Alan's children's instruct fees ($20,000 per year). The instruct fees are GST
ABC besides supposing Alan delay the lowe?-t inconstant phone handset, which consume $2,000 (including GST).
At the end of the year ABC hosted a dinner at a persomal Thai restaurant for all 20 employees and their partners. The sum consume of the dinner was $6,600 including GST.
1. (a) Advise ABC of its FBT consequences arising out of the aloft knowledge, including consideration of any FBT impost, for the year accomplishment 31 March 2017. Assume that ABC would be entitled to input tax credits in kinsman to any GST-inclusive acquisitions.
2. (b) How would your apology to (a) dissent if ABC barely had 5 employees?
3. (c) How would your apology to (a) dissent if clients of ABC besides gay the end-of-year
Question 2 (10 marks)
Two years ago Peta purchased a lineage in Kew. This lineage had two old tennis courts down the end which were in weak case. She purchased the ownership for two reasons:
o • so that she and her nativity could subsist in the lineage; and
o • so that she could uplift three units on the tennis courts and dispose-of them at a
In the vulgar tax year the tennis club proximate door presented to buy the old tennis courts, but barely if Peta highest reinvigorated them to cheerful case. Peta ruled to sanction the club’s present instead of going afore delay her artfulness to uplift and dispose-of units.
Peta spent $100,000 on preparing the tennis courts for sale. This compromised a eminent trade of product. Peta had to resurface the tennis courts and uplift new fences encircling them. She then sold the tennis courts in the vulgar tax year to the tennis club for $600,000.
Ignoring principal gains tax, debate whether the acknowledgment of $600,000 is settled pay beneath s 6-5.