Sandesh is an employee at Ajax Fasteners Pty Ltd (Ajax) and has recently been offered a promotion to manage Ajaxs Head Office in Bendigo. He has negotiated the following remuneration package with Ajax: salary of $250,000; payment of his mobile phone bill ($120 per month, including GST). Sandesh is under a two-year contract whereby he is required to pay a fixed sum each month for unlimited usage of his phone. He uses the phone for work-related purposes only; payment of his daughters school fees ($15,000 per year). The school fees are GST free. Note: Assume that Ajax would be entitled to input tax credits in relation to any GST-inclusive acquisitions.

Required A: (10 marks) Advise Ajax of its FBT consequences, including the taxable value and type of any fringe benefit, arising out of the above information. In your response give reasons and refer to sections of legislation and cases, where relevant You are NOT required to calculate any FBT liability