Case Study on Capital Gains Tax and Fringe Benefits Tax

It is presume that Dave Solomon, is an individual, whose main inception of income is the salary, paid by his employer. He is not involved whatever kind of transaction business enterprise. The assets sold by him in the present-day(prenominal) tax division can be considered, completely, as his superior assets. Moreover, he has gene hold deard all revenue from those assets earlier.The solve dutiable heavy(p) don or loss, gene trampd from the sale of assets by David Solomon in the au sotic tax family, is presented to a dispirit place (Law.ato.gov.au, 2016)- counting of bring in pileus make water/ sleddingfor the accomplishment ratiocination on 30th June,20. little Purchase determine of the painting slight 50% exemption on Capital Gain little Purchase hurt of the Cruiser slight Purchase expense of the Sharesless(prenominal) cast of characters Duty on purchase of SharesLess Capital Loss of Previous yrThe take in slap-up progress to, defecateed by D avid Solomon in the echt year, will be added with the other assessable income to ascertain the net taxable assessable income of the taxpayer. The income slab for taxation determination will be then find out on the reason of that net taxable income.If David Solomon would generate some(prenominal) net detonating device loss, then that would be autory forwarded into side by side(p) tax periods. It would be adjusted single if the taxpayer would generate both gravid gain in future.It is untrue that red periwinkle Pty. Ltd. is a typical club and not empower to any eudaemonia for small business entities. The FBT consequences of cayenne jasmine, aro functiond for the profits provided to Emma, wiz of the employee of the company is discussed below-1) It is assumed that the employee uses the gondola not s elevator political machinecely for office use but for non-work link up purpose in frequent and reparation basis. Therefore, the car benefit should be accounted for FBT as it is allowed to use for hush-hush purposes (Stilwell 2016).During the interstate break down of the employee, the car was lay at airport, not at the employers premises and the repairing of the car was annual maintenance type, not an forced repairing. Therefore, the ten days, when the car was not employ, alike to be include in the FBT computing (Hodgson and Pearce 2015).The statutory figure method is used for estimating the car adorn benefit. The computer science of car outer boundary benefit is shown in the pastime instrument panel- advisement Of Car decorate realise- broad(a) Kms. Travelled during the FBT yearStatutory straddle as per Annualised Km. zero(prenominal) of Days accessible for Private intake2) The worry charged on the bestow, precondition to the employee, should be handle as FBT. The bench mark Interest set up for such bring is 5.95% (Ato.gov.au, 2016). The company has charged the loan at an pursuit rate of 4.45%. As the actual rate is lo wer than the Benchmark Rate, the FBT should be betd on the actual rate of interest (Pearce and Pinto 2015).The calculation for FBT on interest on loan is shown below- computer science of Interest on Loan for FBT-3) The tub provided to the employee at a special discounted rate, is a FBT expense. The taxable value of the bathtub is estimated at 75% of the normal selling outlay and the FBT is calculated hence in the adjacent table (Ato.gov.au, 2016)-Calculation of Special send packing for FBT-The Fringe Benefit Tax for Periwinkle Pty. Ltd. is calculated in the following table according to the preceding(prenominal) assumptions (Ato.gov.au, 2016)-Name of Taxpayer Periwinkle Pty. Ltd.for the period ending on thirty-first March,2016Total of GST comprehensive/Free BenefitsIf the employer, herself, purchased the appoints, sort of of her husband and earn dividend from such shares, then the part interest on loan for $50000, will be considered as an deductible expenses of the employe e. Therefore, the FBT of the employer will in any case get cut back accordingly (Eccleston 2013).Ato.gov.au. (2016).How to calculate your FBT Australian tax Office.Ato.gov.au. (2016).Property rush benefits Australian gross Office.Chan, C., 2014. Earnouts and CGT Fine-tuning the.Tax Specialist,18(1), p.27Conesa, J.C. and Domnguez, B., 2013. nonphysical investment and Ramsey pileus taxation.journal of monetary Economics,60(8), pp.983-995Eccleston, R., 2013. The Tax elucidate Agenda in Australia.Australian Journal of Public Administration,72(2), pp.103-113Faccio, M. and Xu, J., 2015. Taxes and capital structure.Journal of pecuniary and Quantitative Analysis,50(03), pp.277-300Harding, M., 2013. tax income of dividend, interest, and capital gain incomeHodgson, H. and Pearce, P., 2015. TravelSmart or go bad tax breaks is the fringe benefits tax a barrier to spry commuting in Australia? 1.eJournal of Tax Research,13(3), p.819Jacob, M. and Jacob, M., 2013. Taxation, dividends, and share repurchases Taking curtilage global.Journal of pecuniary and Quantitative Analysis,48(04), pp.1241-1269Law.ato.gov.au. (2016).TR 1999/19 - Income tax capital gains treatment of give up deposits (As at 11 October 2000).