Your Best Mate Ltd is GST registered & lends its 4 top executives $10,000 each on the 1st May 2019, interest free ( benchmark rate is 5.25% pa) for the purposes of allowing them to each re-invest the full sum back into the Company to buy more shares. The shares will declare dividends in the future and all of the executives have decided to re-invest their dividends to reduce their loans. The loans need to be repaid in 4 years.

Question 6.1. What is the FBT implication to Your Best Mate Ltd?

Question 6.2 - Q. What if the loans were used to pay for family holidays & not re-investing back into the Company Shares? If there is FBT payable, how much for is owing for the 1st year.