Australian taxation law Assignment Example | Topics and Well Written Essays - 2000 words

Australian taskation law - Assignment Example(1+GST come out) ? FBT rate Hence, the following benefits of Paul shall be as follows Car hit Benefit $22,500 Entertainment Fringe Benefit $ 2,000 Loan Fringe Benefit $ 8,000 ---------------- Employers theatrical role 1 aggregate fringe benefits $32,500 union 46.5% + 10% ------------------------------------------- $32,500 x (1 46.5%) ? (1+ 10%) ? 46.5% rate $32,500 ? 2.0647 = $67,102.75 Total Fringe Liability This is the total value of the fringe benefits revenue enhancement liability of Chatswood Pty Ltd. for the year ended 31 March 2011. For purposes of computation, the FBT year is the 12 months beginning 1 April and ending 31 March. Currently, the FBT rate is 46.5%. A GST of 10% is utilise on most goods and services that are supplied in Australia and on goods imported into Australia2. If an employee receives certain fringe benefits with a total taxable value of more than $1,000 in an FBT year (1 April to 31 March), employer must report the grossed-up taxable value of the benefits on their payment summary for the corresponding income year (1 July to 30 June). This is called the reportable fringe benefits amount3. Therefore, the Fringe Benefits Tax (FBT) that should be paid by the employer Chatswood Pty Ltd., at the end of the year is $67,102.75. The car fringe benefit, the loan fringe benefit and the entertainment fringe benefit which were granted to Paul by his employer are all entitled to Goods and Services Tax (GST) credit that is available to Chatswood Pty Ltd. However, the $1,000 salary of Paul is not considered as a fringe benefit since there is an imposed tax on the salary which is being paid by the employee. As defined under the pay Act of 2005 Fringe Benefits means any consideration for employment provided by way of (a)any privilege, service, facility or amenity, directly or indirectly, provided by an employer, whether by way of reimbursement or otherwise, to his employees (including former employ ee or employees) (b)any free orconcessionalticket provided by the employer for private journeys of his employees or their family membersand (c)any contribution by the employer to an sanctioned superannuation fund for employees.4 The total value of all fringe benefits given to a particular employee by his or her employer in an FBT year is known as their individual fringe benefits amount. 2. Peters is liable to pay a capital gains tax (CGT) for the sale of the gift shop for the year 2010/2011 based on the following computation Gross Sale Proceeds from the gift shop $840,000 little Incidental Cost of Disposal $(60,000) Net Sale Proceeds $780,000 Less Cost of Asset $(450,000) Capital Gain $330,000 Therefore, Peter shall be liable to pay a CGT on his gain amounting to $330,000. Capital gains tax is a tax on the profits which may be made from the sale of capital assets. Only individuals are liable to pay CGT, corporations are not liable to CGT. A liability to pay CGT arises only when a chargeable person makes a chargeable disposal of a chargeable assets5. Some of chargeable assets include lands and buildings, paintings, jewelry, coiffure and machinery. However, no CGT shall be imposed on the sale of his main residence as he is entitled to Private Residence Relief. To qualify for the resistance based on the Private Residenc