Scott is the sole director and shareholder of a company called Go Slow Pty Ltd. It is involved in marketing holidays to exclusive overseas destinations. It is located in Southbank. It is registered for GST and is a small business entity. During the year the company had the following transactions:

1. The company bought a luxury 4-wheel drive vehicle that could transport 12 people to remote locations in Australia. The vehicle cost $250,000 including GST. The car was bought on 2 February 2022 . The company tells you that the car is used100%of the time for work purposes only. It has an effective life of 12 years. Unfortunately, on the 21 May 2022 when out celebrating the Federal elections the vehicle was crushed and destroyed by patrons upset by the election result. The company received$285,000in insurance proceeds. 

2. The company also ordered from Singapore some flyers and toys to promote travel around Australia. The order was placed on 27 June 2022, but by 30 June 2022 they had not been received. The cost of the flyers and toys was$33,500. 

3. To promote the company, Scott had some t-shirts made up with the name of the company on them he encouraged the staff to wear them. The cost was$2,800

REQUIRED: 

Please advise the company on the tax consequences of the above three transactions In your answer you must refer to the relevant legislation and case law where appropriate.

Answer rating: 100% (QA)

1 The company can claim a deduction for the cost of the vehicle in the year it is acquired However because the vehicle was destroyed within the year t... View the full answer