QUESTION 2 AGGREGATE FRINGE BENEFITS, FBT LIABILITY CALCULATION

Jiaolong 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

Jiaolong received from his employer

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

2. Gym Membership for himself and his partner

The employer paid Aquagym directly an amount of $598 for 2 gym memberships for Jiaolong and his spouse.

3. Low rate interest loan

Jiaolong has a low interest loan of $500,000, which he used (40%) to pay off his home mortgage in a Melbourne property and the balance (60%) as a deposit for a rental apartment at Phillip Island. He pays a rate of 2.07% on this loan. (The benchmark interest rate is 5.37% for the 2020 FBT year.)

4. Housing

The employer rents a modest 4-bedroom home at market value in Mildura for $400/wk for Jiaolongs family use for the 5-year contract. Jiaolong makes no contribution to the rent and rents out his home in Melbourne.

5. Company car

Jiaolong drives a car for work costing $80,000. He travels 30,000 km in the FBT year given he attends a fortnightly Managers Meeting in Melbourne. Jialong gives the employer $2,000 for the year as he has exclusive use of the car for business and private use. Jioalongs employer chooses the Statutory Method to calculate FBT.

REQUIRED

Part 1

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

(9 marks)

Part 2

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