Taxation Theory and Practice Assignment- Answers

Question 1
Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates around Mt Hotham in Victoria. On 1
May 2019, Perisher provided Nikita (one of its employees) with a car as Nikita does a lot of travelling for work
purposes. However, Nikita’s usage of the car is not restricted to work only. Perisher purchased the car on that
date for $44,000 (including GST) plus $2,000 (including GST) dealer delivery charges.
For the period of 1 May 2019 to 31 March 2020, Nikita travelled 12,000 kilometers in the car and incurred
expenses of $770 on minor repairs that have been reimbursed by Perisher. The car was not used for 10 days
when Nikita was interstate and was parked at the airport and for another five days when the car was scheduled
for annual repairs.
Calculate the Fringe Benefits Tax Liability for Perisher, please have a look at the matrix below on how to
answer the question
QUESTION 1: Calculate the FBT liability for Perisher Pty Ltd Weighting
Identification of material facts (issues) regarding fringe benefits provided to Nikita 1 %
Identification and analysis of legal issues / legal question and relevant taxation law in regards to
fringe benefits (e.g. FBTAA 1986).
1 %
Thorough application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Perisher’s
case.
1 %
Accurate conclusion of the FBT calculation. 5 %
Correct information and taxation law have been used and properly cited. A detailed analysis has
been performed.
2 %
QUESTION 1 TOTAL MARKS: 10 %
HI6028 Taxation Theory, Practice and Law Individual Assignment T2.2020 4

QUESTION 2
Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of the
following assets:

1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August
   1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,000
2. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’st
   January 2015 for the amount of $20,000
3. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought it
   second hand on 10’th October 2018 for $350.
4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August
   2018
5. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994
   Advise the Capital Gain Tax Consequences for the above transactions, please have a look at the matrix
   below on how to answer the question
   QUESTION 2: Capital gain tax consequences Weighting
   Identification of material facts on regard to each case 2 %
   Identification and analysis of legal issues / legal question and relevant taxation law for each case. 2 %
   Thorough application of ITAA 1997 to material facts. 2 %
   Accurate conclusions are reached from each case. 6 %
   Correct information and taxation law have been used and properly cited. A detailed analysis has
   been performed.
   3 %
   QUESTION 2 TOTAL MARKS: 15 %