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On 1 May 2018, CRU purchased a new car costing $70,000 (GST inclusive). The car has a fuel consumption that does not exceed 7 litres per 100...


On 1 May 2018, CRU purchased a new car costing $70,000 (GST inclusive). The car has a fuel consumption that does not exceed 7 litres per 100 kilometres.

 

The car was garaged at Lucy's house most nights as there was no covered and secure parking space at CRU's offices in the city.

 

The particulars for the year regarding the car and for which invoices are retained, including a log book, include:

 

Stamp duty                                                                             $320

Registration & Insurance                                                      $900

Petrol and oil                                                                         $1,900

Repairs & Maintenance                                                         $500

Total kilometres travelled (as per log book)                         38,000 kms

Business kilometres travelled                                               16,000 kms

Lucy's contribution for petrol and oil                                               $849

 

Lucy uses the car to travel from home to work in the mornings, and sometimes uses the car during the day to travel to meet with wholesale customers and market the new range of clothes being imported. Otherwise, the car is usually garaged at a parking station near CRU's offices. Lucy pays the parking fee of $20 a day and is reimbursed the cost by CRU. The parking fee is ordinarily a deductible business expense.

 

On 1 July 2018, following resolution at the company's Annual General Meeting, CRU agreed to provide Lucy with a $20,000 loan at 2% pa to help pay the school fees for her eldest daughter. The articles of association of CRU prohibit the making of loans to directors.

 

Lucy also bought children's clothes from CRU for her two youngest children. She paid $500 for the clothes which cost $200 to produce but are sold to wholesale customers for $900.

 

 

Advise about the fringe benefits tax liability for the current FBT tax year

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