Question 3: 40 Marks (24+16)

Tom has been appointed Manager of a national poultry and meat processing company in Mildura from 1 April 2020 for 5 years and has received a salary packaging arrangement, involving:

1. Salary, Bonus, Clothing allowance and Superannuation benefits received from his employer

• $100,000 salary and $20,000 bonus
• $5,000 clothing allowance
• $25,000 employer sponsored superannuation contribution Tom's chosen superannuation fund.

2.Gym Membership for himself and his partner.

3 .The employer paid Fitness gym directly an amount of $598 for 2 gym memberships for Tom and his spouse.

4.Low rate interest loan.

5.Tom has a low interest loan of $500,000, which he used (60%) to pay off his home mortgage in a Sydney property and the balance (40%) as a deposit for a rental apartment at Phillip Island. He pays a rate of 2.8% on this loan. (The benchmark interest rate is 4.8% for the 2021 FBT year).

6.Housing

The employer rents a modest 4-bedroom home at market value in Ivanhoe for $400/week for Tom's family use for the 5-year contract.Tom makes no contribution to the rent and rents out his home in Sydney.

7.Company car

Tom drives a car for work costing $80,000. He travels 30,000 km in the

FBT year given he attends a fortnightly Manager's Meeting in Melbourne. Tom gives the employer $2,000 for the year as he has exclusive use of the car for business and private use. Tom 's employer chooses the Statutory

Method to calculate FBT.

REQUIRED

Part 1

In relation to Tom's salary packaging arrangement, calculate the aggregate fringe benefits under s 5C FBTAA 1986.

(24 marks)

Part 2

Calculate the FBT payable under s 5 and s 66 FBTAA 1986.

(16 Marks)

You can assume that Tom is the only employee receiving any fringe benefits. In your response, ensure you state the appropriate legislation tax rulings or common law cases to support your answer and calculations.

All references below refer to the Fringe Benefits Tax Assessment Act 1986

Benefit	Taxable value	Basis of calculation and explanation(include relevant sections)
1.Salary, Bonus, Clothing, Superannuation
2.Gym Memberships Expense Payment fringe benefit
3.Low rate personal loan
4.Housing Benefit
5.Company car
Total Aggregate Fringe Benefits amount
Type 1 Aggregate Fringe Benefits - Grossed up
Type 2 Aggregate Fringe Benefits - Grossed up

Total FBT taxable amount
Multiply by FBT rate
Total FBT Liability payable for Jialun's salary package