LAW6300.TutorialPaper.No.11.2.2016

LAW6300.TutorialPaper.No.11.2.2016 - EDITH COWAN UNIVERSITY...

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EDITH COWAN UNIVERSITY PRINCIPLES OF TAXATION LAW – LAW6300 TUTORIAL PAPER NO. 11 2/2016 QUESTION 1 On 1 April 2015, Joanna entered into a contract of employment, as a sales manager, with DotCom Pty Ltd (“Dotcom”), which carries on a business as computer distributors. As part of her remuneration package, she: (i) receives a salary of $75,000 per annum; (ii) receives a fully maintained company car, a Holden Astra, which is available for her private use all year; and (iii) is entitled to the use of an IBM laptop PC for work at home as she has to work for long hours. The PC costs $3,500. On 1 April 2015, Dotcom purchased the car for $22,500. For the FBT year ended 31 March 2016: (i) the total running costs of the car (not including depreciation) were $8,000; (ii) the car travelled 20,000 km during the FBT year, of which 5,000 km were for purposes of the business; and (iii) Joanna did not make any contribution towards the costs of running the car. [For the purposes of this Question, the Holden Astra is a “car” as defined in s.136(1) of the FBT Act]. Advise DotCom Pty Ltd as to its FBT liability arising from above arrangements for
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