Question 6 Total 18 marks Part a) Sharon's employer provides her with the private use of a motor vehicle which cost the employer $90,000 (inclusive of GST and luxury car tax) on 1 April, 2017. She travelled 50,000 kilometres during the 2018 FBT year of which 30,000 were for business. Sharon's employer is registered for GST and claims input tax credits on the motor vehicle. The total running costs of the vehicle were $10,000 to which Sharon contributed $1,500. Sharon's employer also provided her with a $600,000 loan at a fixed rate of 1% interest. The principal will be payable in full in 2021, or when she leaves her position with her employer, whichever comes first. Half of this loan was used to finance the purchase of a rental property and the remaining half was for private purposes. Please use a statutory interest rate of 7.4% Required: Calculate the employer's total FBT liability for the benefits provided to Sharon for period ending 31 March, 2018. Use the operating costs method for the motor vehicle benefit (10 marks) Part b) (a) What is the GST? (4 marks) (b) What are the advantages and disadvantages of taxes such as the GST (4 marks) Page 5 of 5 2018 OCT 03 ACCY963 Sydney exarn, Thenoster 3, 2018 Question 6 Total 18 marks Part a) Sharon's employer provides her with the private use of a motor vehicle which cost the employer $90,000 (inclusive of GST and luxury car tax) on 1 April, 2017. She travelled 50,000 kilometres during the 2018 FBT year of which 30,000 were for business. Sharon's employer is registered for GST and claims input tax credits on the motor vehicle. The total running costs of the vehicle were $10,000 to which Sharon contributed $1,500. Sharon's employer also provided her with a $600,000 loan at a fixed rate of 1% interest. The principal will be payable in full in 2021, or when she leaves her position with her employer, whichever comes first. Half of this loan was used to finance the purchase of a rental property and the remaining half was for private purposes. Please use a statutory interest rate of 7.4% Required: Calculate the employer's total FBT liability for the benefits provided to Sharon for period ending 31 March, 2018. Use the operating costs method for the motor vehicle benefit (10 marks) Part b) (a) What is the GST? (4 marks) (b) What are the advantages and disadvantages of taxes such as the GST (4 marks) Page 5 of 5 2018 OCT 03 ACCY963 Sydney exarn, Thenoster 3, 2018