Yvonne is Director, Technical Operations at Data Technologies Ltd (DTL), based in Auckland. She is highly valued for her technical skills. To recognise her valuable skills and to ensure that Yvonne continues to work for DTL, the company is considering one or more of the following options to reward Yvonne (in addition to her salary).

 

(i) Provide Yvonne with a central-city apartment in Auckland for her to live in at a reduced rent. DTL owns the apartment.

 

(ii) Pay a lump-sum payment of $100,000 to Yvonne in return for her entering into an agreement with DTL to continue to work for DTL for the next two years.

 

(iii) Pay Yvonne's gym membership, and all her medical and dental expenses while she remains an employee of DTL.

 

 

REQUIRED:

Your advice is sought on the tax implications (if any) of the following amounts.

 

(a) An apartment provided by DTL to Yvonne at a reduced rent.

 

(b)  A lump-sum payment of $100,000 made to Yvonne for agreeing to work for DTL for the next two years. 

 

(c) The payment by DTL of Yvonne's gym membership, and all her personal medical and dental costs. 

Answer rating: 100% (QA)

a The provision of an apartment by DTL to Yvonne at a reduced rent would have tax implications It wo... View the full answer