Harry borrowed $160,000 on 1 April 2018 at an interest rate of 3% from his employer, KOI Pty Limited. The loan was to be for 5 years. The loan money was used to purchase CBA bank shares from which he would be the recipient of regular dividends. The loan lasted from 1 April 2018 to 31 March 2019 but on the 31st March 2019, the employer, KOI Pty Limited announced that Harry was a highly regarded employee and that his debt was now reduced and he was not required to pay back $70,000

Required:

Explain to KOI Pty Limited which fringe benefits would apply and refer to the relevant section(s) of the FBTAA that apply.
Then show the taxable values (if any)
Then show how you would calculate the fringe benefits tax payable (if any) rounded to the nearest dollar for the 2019 FBT year
Who is liable to pay the Fringe Benefits Tax? Explain

Your answer must include explanation of the legal principles as well as all relevant calculations.

Answer rating: 100% (QA)

The Fringe Benefits Tax FBT in Australia is a tax on benefits that employees receive as a result of their employment relationship other than their sal... View the full answer