Dale is studying mechanical engineering at Monash University. He asks you as his friend for advice to assist him to deal with some questions related to his residency status and GST:
A) He completed high school in France and then a bachelor of engineering in Germany. Most of his family members are in France, some are in Germany. He holds a UK passport, and currently undertakes a postgraduate degree in Australia based on a three year student visa. He first arrived in Australia on 3 February 2017, and spent a couple of weeks travel around the country, he also travelled to New Zealand in late February 2017. After returned to Melbourne in early March (two days before semester starts), he found himself an apartment and entered into a one year lease. He also found himself a part-time job in an engineering firm. Dale wonder if he is likely to be a resident for tax purpose in FY2017 and FY2018. (9 marks)
B) What is the meaning of a taxable supply (for GST purpose)? Can you give two examples of GST free supplies? What is the threshold of turnover that taxpayers can earn up to and still use the cash method to account for GST for the year ended 30 June 2017? (6 marks)
Required: please assist Dale by providing him with the answers to both part A & B. [9 + 6 = 15 Marks]
XYZ Pty Ltd is a furniture manufacturer. It has provided the following benefits during
the 2015 FBT year to John, an employee:
1. A car (owned by the company) which cost $60,000 and has travelled
30,000km for the entire FBT year. According to the log book, the car travelled
6,000 km for work purposes. Petrol, registration and maintenance for the FBT
year amounted to $1,000. The car was provided to the employee for the full
FBT year. The car was slightly damaged in an accident during the year and
John paid for the repair costs of $1,500.
2. A car allowance of $3,000 was paid to John.
3. John was allowed to buy a bed from XYZ Pty Ltd’s factory floor for $200. Such
beds are normally sold to wholesalers for $4,000. XYZ does not sell it to the
members of the public.
4. A $100,000 loan was provided to John at 4.50% interest on 1 May 2014. The
loan was used by John to renovate his home. No repayment had been made
by 31 March 2015.
5. Payment of home telephone bill in the amount of $3,100. 40% of the calls
were work related. John had to reimburse the company $200.
XY Pty Ltd is registered for GST.
Advise XYZ Pty Ltd of its FBT implications for the 2015 FBT year. Briefly
explain your answer and show calculations where relevant including the
grossed up factor. (15MKS)
Type 1 benefit gross‐up factor: 2.0802
Type 2 benefit gross‐up factor: 1.8868