Relation to any gst-inclusive acquisitions

Assignment Help Taxation
Reference no: EM13879052

Question 1:

Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the following remuneration package with ABC:

• Salary of $300,000;
• Payment of Alan's mobile phone bill ($220 per month, including GST). Alan is under a two-year contract whereby he is required to pay a fixed sum each month for unlimited usage of his phone. Alan uses the phone for work-related purposes only;
• Payment of Alan's children's school fees ($20,000 per year). The school fees are GST free.

ABC also provided Alan with the latest mobile phone handset, which cost $2,000 (including GST).

At the end of the year ABC hosted a dinner at a local Thai restaurant for all 20 employees and their partners. The total cost of the dinner was $6,600 including GST.


(a) Analyze and then advice ABC of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2015. Assume that ABC would be entitled to input tax credits in relation to any GST-inclusive acquisitions.

(b) How would your answer to (a) differ if ABC only had 5 employees?

Question 2:

The Big Bang Company was set up by Ed, an Australian resident. It is incorporated in Singapore and has two directors who are resident in Singapore and who hold board meetings in Singapore. Each director has two shares in the Big Bang Company, which they hold on trust for Ed. The Big Bang Company owns real property, all of which is outside Australia, and makes its profits from commercial property leases on a large scale. Ed does not attend the board meetings in Singapore; however, the constitution of the Big Bang Company provides that the decisions of the directors are only effective if Ed concurs with them.

The directors carry on all operational activities, such as collecting rent, paying commission, finding tenants, making minor repairs and maintaining the buildings.


Is there any possible scenario in which the Big Bang Company could be considered a resident of Australia for tax purposes? Refer to Ruling TR 2004/15, justify your answer considering all the possibilities applicable in this scenario to become a resident of Australia. A detail analysis of each possibility is required.

Verified Expert

Reference no: EM13879052

What amount of cash payments were made for income taxes

Kinsey Corporation reported income taxes of $360,000,000 on its 2014 income statement and $525,000,000 at December 31, 2014. What amount of cash payments were made for incom

Analyze the rules and how they apply to this situation

Identify the issue(s) - Identify the rules (Code section, regulations, case authority, administrative rulings (if any)) and analyze the rules in 2 and how they apply to this s

Calculate the depreciation for 2010

Calculate the depreciation for 2010. If Salem had been located in a qualified enterprise zone, what would be the depreciation amount? Explain the depreciation method you use

Why did the supreme court reject his argument

Identify two strategies for reducing excess credits - What would be the worldwide effective tax rate on the $1 million of foreign profits, assuming the U.S. taxes the worldwi

Shares of newco common stock

On March 2, in an unrelated transaction, B transfers property with a basis of $1,000 and a value of $10,000 for 10 shares of Newco nonvoting preferred stock (that is not non

What is the estate tax due with respect to lonnie death

Lonnie died in 2015 with a taxable estate of $6,430,000. This figure does not include any value, if applicable; associated with a $5,000,000 life insurance policy Lonnie had

What tax factor should clark consider before making decision

It is now December of the current year, and Clark is deciding whether or not he should sell the stock. What tax and nontax factors should Clark consider before making the de

How would you address the situation

There is a significant amount of gray area when interpreting tax regulations. There are several resources available to assist tax preparers in addressing these issues, such


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd