A company files Fringe Benefit Tax (FBT) returns on a quarterly basis. The company provides the following fringe benefits during the year to the managing director (who is not a major shareholder of the company):

Availability for private use of a motor vehicle with taxable value of $4,000 per quarter.

Medical insurance with taxable value of $3,000 per quarter

Free goods with taxable value of $8,000 per quarter

The managing director has a salary of $250,000 per annum. The company decides to carry out the full alternate rate calculation in the fourth quarter. Under the alternate rate calculation, the motor vehicle, medical insurance premiums and free goods are all required to be attributed to the managing director.

The personal income tax rates are follows:

Range of cash pay ($) Tax Rate (%)

0-14,000 10.5

14,001-48,000 17.5

48,001-70,000 30

70,001and over 33

The tax rates on all-inclusive pay are as follows:

Range of all-inclusive pay ($) Tax Rate (%)

0-12,530 11.73

12,531-40,580 21.21

40,581-55,980 42.86

55,981and over 49.25

Required

Calculate the FBT liability on the fringe benefits provided to the managing director. Show all workings

Answer rating: 100% (QA)

Answer To calculate the Fringe Benefit Tax FBT liability on the fringe benefits pro... View the full answer