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Exam 5: Fringe Benefits Tax

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Question 1

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An employer purchases a car on 1 May 2019 for $33,000 and provides that car to an employee to use for private purposes for the rest of the FBT year. A log book was maintained by the employee, which showed their work related use of the motor car to be 30%. If the employee reimbursed the employer $3,000 for using this car and the total operating costs for this car (including any deemed depreciation and interest) were $16,000, what would be the taxable value of this car fringe benefit provided under the operating costs method?

A) $16,000
B) $11,200
C) $8,200
D) $1,800

E) A) and C)
F) B) and C)

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Question 2

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ABC Computers reimburses the telephone expenses ($120 per month) , for each month of the FBT year ended 31 March 2020, of an employee. The employee has kept records showing that 70% of her telephone expenses relate to work calls. What is the taxable of this expense payment fringe benefit provided by ABC Computers?

A) $0
B) $432
C) $1,008
D) $1,440

E) B) and D)
F) B) and C)

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Question 3

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Which of the following is not an obligation of either the employer or employee in terms of the reporting and payment obligations of any fringe benefits tax liability?

On 1 April 2018, a company provided its employee Jason with the use of a two-bedroom apartment in Brisbane. During the FBT year ending on 31 March 2019, the market rental rate for this apartment was $400 per week ($20,800 annually) and Jason paid $100 per week ($5,200, annual rent payment). The weekly market rental in the FBT year ending on 31 March 2020 increased to $440 ($22,880, annual total rental), and the company did increase Jason's weekly rental rate to $120 per week. What is the employer's FBT liability on the provision of this accommodation?

Bells Pty Ltd sells telephone systems to the public and on occasion they sell off some of their old furniture to employees at 10% of its resale value. For the FBT year ended 31 March 2020, Bells Pty Ltd sold 10 items of furniture that a resale value of $5,000 in total. These items were sold to staff for $500. What is the taxable value of the sale of this furniture to employees?

A company has 40 employees and provides each of them with cheap parking on its premises. During the FBT year ended 31 March 2020, there were 216 days during which the reduced carparking was made available.The daily rate amount for each parking space is determined to be $14. Each employee who received the reduced rate parking contributed $4. What is the taxable value of the carparking fringe benefit provided to these employees if the employer elects to use the statutory formula method?

Which of the following would not involve a fringe benefit?

An employer purchases a car on 1 October 2019 for $35,000 and provides that car to an employee to use for private purposes for the rest of the FBT year. If the employee reimbursed the employer $2,000 for using this car, what would be the taxable value of this car fringe benefit provided under the statutory formula method?

Jenny is an employee and she is based in the company's Melbourne office and lives in a three-bedroom house in Melbourne, which is under her name. In order to complete a project, Jenny was seconded to the Sydney office for 18 months starting on 1 April 2019 and her husband and child (aged 8 years old) moved with her for the whole period. During the 2019-2020 FBT year, the company provided Jenny with a LAFHA for $860 per week, consisting of $560 per week for accommodation and $300 per week for food. Jenny made a declaration for living away from home to her company, provided the required documentary evidence to show that she spent at least $560 per week for the rental but she did not substantiate the food expenditure as the amount that she actually spent on food is less than the Commissioner's reasonable food amount ($472). What is the taxable value of the LAFHA FBT for the company?

If BZ Engineers provides its two employees with $460 worth of protective clothing (each) , for no cost to each employee, for use only at work, during the FBT year ended 31 March 2020, what would the taxable value of this external property fringe benefit be?

Josie is a full-time employee of a company and works 5 days a week and 8 hours per day. As part of her salary package, the company allows Josie to park her car on the business premises on her working days for $2 per day. Within one kilometre from the company's premises, there are two commercial car parks that are open to the public. The early bird all-day parking rates charged by these two car parking stations are $16 and $19. During the FBT year ending on 31 March 2020, Josie worked 220 days. What is the company's FBT liability?

An employer provided an interest-free loan of $50,000 to an employee on 1 April 2019. The employee used this loan 50% for private purposes and the remaining 50% was used to purchase shares in companies that pay dividends. What is the taxable value of this loan fringe benefit?

Which one of the following is not correct with respect to the reportable fringe benefit amount?

Which of the following statements is true for the way in which any fringe benefits tax liability is calculated?

Which of the following statements about the way FBT liability is calculated is incorrect?

Which of the following is not a stated reason why the fringe benefits tax was introduced into Australia?

BBC Earthmovers Pty Ltd provides an employee with the use of a company car for each day of the FBT year ended 31 March 2020 and the employee is able to take this car home every night. The car cost $44,000 and was purchased on 1 April 2019. A log book has been kept showing that the work related use was 30% for the year. The various running costs, including the deemed depreciation and interest, amounted to $19,000. The employee paid the employer $5,200 for the use if this car for the year ended 31 March 2020. Calculate what the FBT liability of BBC Earthmovers Pty Ltd is in relation to this car fringe benefit provided for the FBT year ended 31 March 2020.

Furniture Kings Ltd manufacture various furniture items and to reward employees they allow employees to purchase up to three furniture items per year at 50% of the selling price. Calculate the company's FBT liability if Ann purchases 3 items @ $500 each during the FBT year ended 31 March 2020?

An employer provides a $30,000 loan to an employee, in respect to their employment, at an interest rate of only 2%. All of the loan monies are used for private purposes. What would be the taxable amount of this loan fringe benefit?

Which of the following would not involve an application of the otherwise deductible rule?