Each of parts (a) to (g) below contain separate statements that you are required to answer separately. For each statement indicate whether it is TRUE or FALSE and briefly explain your reasons with reference to legislation, case law or rulings (as appropriate).

1. Benefits received by employees through frequent flyer programs, that arise from employer-paid expenditure (e.g. the employer paying for the employees work-related flights), are not assessable income when converted into free flights for private purposes.

[2 marks]

2. As a partnership is a separate legal entity a salary paid to a partner will be deductible when calculating the net income of the partnership.