Question 6: (2*7 = 14 Marks)

a) Mr. and Mrs. Jeremey run a business and employ their only nephew Russell. They give Russell a birthday, Easter, and Christmas gifts each year while he is employed in the business. Some years later, after Russell has ceased to work in the business, Mr. and Mrs. Jeremey give him an expensive car as a special present. Is the present a fringe benefit as Russell is the employee of the business explain your opinion. [Answer here]

b) What is the purpose of s40-880 ITAA97? What types of expenditure are expressly excluded from the operation of the provision? Provide some examples of expenditure that would fall within the provision. [Answer here]