Tax consequences of transaction

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Reference no: EM13174194

Question

Determine whether the following benefits are fringe benefits or exempt fringe benefits and, where applicable, the relevant category of fringe benefit. Provide reasons for your answer:

a) Kerry is an employee of the university. She is provided with 10 gift vouchers worth $50 each for use at the local supermarket as a Christmas gift. Advise Kerry and the University of the Tax Consequences of this transaction.

b) Sorella borrowed $10,000 from her employer on 4 September 2011 as her home was damaged in a freak storm. The loan was provided at no interest. On 15 January 2012, her employer informed Sorella that she was only required to repay half the loan. Advise Sorella and her employer of the Tax Consequences of this transaction.

c) Penny is employed as a secretary by a law firm. As part of her remuneration package, the firm agrees to provide her with legal services in relation to her divorce at a 60% discount to its normal rates. The firm also purchases a plasma TV set for $5,500 (inclusive of GST), which it gives to Penny. Explain how the taxable value of these fringe benefits will be calculated.

Reference no: EM13174194

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