Fringe Benefit Tax Implications for Shine Homes

The assignment explores the concept of Fringe Benefit Tax (FBT) on accommodation in the context of Charlie's employment with Shine Homes. Charlie uses a company-provided car for both personal and professional purposes, including a honeymoon trip paid for by Shine Homes. The FBT is calculated based on the total amount incurred as fringe benefits, which includes parking fees, hiring costs, and expenses related to producing taxable income. The study highlights relevant case laws and sections of the Australian Taxation Office (ATO) regulations, emphasizing the importance of compliance with subsection 51(1) of the Income Tax Assessment Act 1997. Ultimately, the use of the vehicle by Charlie attracts a significant amount of FBT.

Running head: TAXATION
Taxation
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Issue............................................................................................................................................2
Law.............................................................................................................................................2
Application.................................................................................................................................3
Employment duties of an Itinerant Nature:................................................................................5
Car parking fringe benefit:.........................................................................................................5
FBT on accommodation:............................................................................................................6
Conclusion..................................................................................................................................7
Reference List:...........................................................................................................................8

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Issue
The main issue of the study have been seen in terms of the evaluation of the different
aspects of tax determination of and know about the impact of Shine Homes and Charlie. This
has been further determined with the case study of Charlie who is an employee of Shiney
Holmes Pty Ltd. has been further seen with the real estate agent. On the contrary Holmes has
been able to perform business landscaping to provide 4 wheeler sedan car. As per “Section 6
of the Miscellaneous Taxation Rulings and Fringe Benefit Tax Assessment Act 1986” the
various types of the provision has been seen with the different types of the circumstances
defined under the fringe benefit taxation rulings (Rootes, 2014).
Law
a. “Section 6 of the Miscellaneous Taxation Rulings and Fringe Benefit Tax
Assessment Act 1986”
b. “Taxation rulings of MT 2027”
c. “Section 136 (1)”
d. “Sub-section 136 (1) of the Miscellaneous Taxation Rulings of 2027”
e. “Section 51 of the Income Tax Assessment Act 1997”
f. “Miscellaneous Taxation Rulings of 2027”
g. “Sub-division F of Division 3”
h. “Taxation rulings of IT 112”
i. “Section 51 of the Income Tax Assessment Act 1997”
j. “Newsom v Robertson (1952) 2 All ER 728; (1952)”
k. “Simon in Taylor v Provan (1975) AC 194”
l. “FBT Act 1986”
m. “Fringe Benefit Tax Act 1986”
n. “TR 94/25”
o. “Section 5 of the Fringe Benefit Tax Act 1986”
p. “Subsection 51 (1) of the Income Tax Assessment Act 1936”
q. “Subsection 51 (1) of the ITAA 1997”
r. “Section 5 of the Fringe Benefit Tax Act 1986”
s. “Tubemakers of Australia Ltd v. FC of T 93”

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Application
As determined under “taxation rulings of MT 2027” under “sub section 136 (1)”, the
use of the assessable income will be considered based on the private usage. Despite of this, as
per “sub-section 136 (1)”, has stated on the various types of the operating cost as per the
valuation method has been used in the business and the same has been stated with the private
use made by the associate or the employees. As per the paragraph 3, the different types of the
“Miscellaneous Taxation Ruling” is required for the business in terms of recording in the
logbook and the same has been seen as an identical form of the document for the use in the
private use of a car and the same has been applied as per the operating cost methodology. It
has been further determined that the different types of the consideration made in the taxation
has been based on the travelling distance of Charlie with more than 50,000 km relating to
work. The operational cost model is applicable for the determination of the fringe benefit of
the car and the same has been complied with the ‘sub-section 136 (1) of the Miscellaneous
Taxation Rulings of 2027” (Australian Trade Commission, 2015).
The main question has been seen in terms of the determination of taxation arise out of
the business and personal use. Henceforth, the car used by the employee was taken
exclusively in course in generating the assessable income of the employee. The various
considerations has been taken with various factors in assessing of the income which needs to
be produced as per the assessable income and done as per “sub section 136 (1)”. The study
has further followed the course of employment that has been able to provide the various types
of the business activity carried with the employment activity of the employee constituted with
the use of FBT. In addition to this, the car made by the associate has been taken into
consideration with the business which is carried out in a similar fashion and considered for
the purpose of business use.
As per the given in the case, Charlie has made use of the vehicle at the time of his
employment and this has been carried out with the business activities. Charlie has been
further seen to use the car in the production of the assessable income of the employee and the
same has been able to attract Fringe benefit Tax.
The various types of the test has been further seen to be based on the as per both
private and business for FBT and the same has been seen to be applicable with assessing the
deductibility rationale under “section 51 of the Income Tax Assessment Act 1997”. Different
types of the evidences has been inferred from use of car by the use of employment and the

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same needs to be considered as per the deductions of income tax. The determination of the
various types the difference among the business use and private use has been seen with the
use of present case Charlie and the same needs to be evaluated as per the deductions
allowable for the income tax (Australian Government, 2015).
The various types of the consideration has been further seen to be consistent with the
guidelines derived from the “Miscellaneous Taxation Rulings of 2027” and the different
types of the principles has been further seen to be applied based on the income tax. The
various types of the rulings of the taxation has been further seen to be assessed on the
different types of the rulings stated under “Sub-division F of Division 3 of the income tax”
in terms of car expenses incurred and the aspect which needs to be considered for the income
tax determination.
The tax ruling has been seen to be based on the determination as per “taxation rulings
of IT 112” and the decision needs to be held as per the given case of “Lunney and Hayley v
FCT (1958)”. The circumstance related to the same has been considered as per the various
consideration of ordinary private travel. The different types of the consideration relating to
travel to work is considered as a mandatory requirement for the assessment of the income and
this aspect cannot be considered in the course income and earnings. Hence, the distance
travelled by Charlie needs to be considered as private and the aspect that he has made use of
during his employment. It further needs to be considered that the various types of the other
aspects related itinerant nature of the employment. The main reference of the case has been
further seen to be taken based on the “Newsom v Robertson (1952) 2 All ER 728; (1952)”,
the cost consideration has been considered with Charlie in travelling from home to the place
of work and the cost involved in the same. It has been further discerned that the court has
been able to acknowledge the travel expense which has been considered in travelling from

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home to the chambers or to various courts in course of the day has not amounted to the
expenses (Hosking, 2016).
Employment duties of an Itinerant Nature:
It has been discerned that for a long time, travel of employee from home may be
constituted as a business travel on such a situation where the individual is seen to be
unemployed and is inherently itinerant. As per the case of “Simon in Taylor v Provan (1975)
AC 194”, the travel of Charlie has been considered as employment travel as the travel has
been considered as the fundamental part of his work. Moreover, the employment terms of
Charlie is required to discharge the various types of the employment duties considered more
than once based on the place of employment (Australian Taxation Office, 2015).
It has been further seen that as per the “FBT Act 1986”, Charlie was seen to be using
the car of the employer partly used for employment purpose and partly used for private
usage. Charlie has been further seen to incur the costs such as cost of repairs, registration,
insurance and maintenance. Henceforth, for the purpose of FBT deductions Charlie will be
able to claim the various types of the work related portion of the cost as it was utilised for
producing the assessable income (Taylor et al.,, 2015).
Car parking fringe benefit:
The car parking fringe benefit has been seen to be considered as per employer’s
parking based on the following conditions:

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a. The car has been parked in the premise and the same was seen to be owned or leased
under the control of provider
b. The car had been seen to be parked exceeding four hours
c. The vehicle has been leased or owned as per the control of employee
d. The vehicle was given in respect to the employment of the employee
e. The car has been further seen to be used as per the travel between work and home for
minimum of one day
The same has been further seen to be evident with the aforementioned conditions. It
has been discerned that Charlie has parked his car at a secure area of parking which has
been considered from the employer and for the same Shine Homes has made a payment
of $ 200 every week. The main consideration has been further able to show that the car
was parked in the garage of Charlie and the same was under the control of the provider.
The vehicle was further provided to Charlie as per the terms of his employment. In
addition to this, Charlie was able to use the car for travelling from home to work every
day. Henceforth, the fringe will arise as per the deductions claimed with Charlie and
Homes with parking fees paid on behalf of the employee (Devos, 2014).
FBT on accommodation:
As per the “Fringe Benefit Tax Act 1986”, the main form of the provision has been
represented with the entertainment in form of accommodation, drink or recreation which is in
connection to the entertainment. As evident from the case stud, Charlie has encountered with
a minor accident was not able to use the vehicle for a total period of 2 weeks. This has been
further seen to be taken based on the wedding of Charlie and Shine Holmes, who under took
the decision for hiring of the car for that particular period and allow Charlie to attend his
honeymoon (Grantley Taylor & Richardson, 2013). The present circumstance has been
further seen to be considered as per the fringe benefit provision for tax, which has been able
to attract the tax liability for the entertainment of the employees and the non employees for a
weekend, thereby offering them a holiday. As per the given situation it has been further seen
that the different types of the rulings and the timing of the fringe benefit and the instalment of
fringe benefit has been taken into consideration based on “subsection 51 (1)”. As per the
rulings of taxation “TR 94/25”, the fringe benefit instalments is generally considered as per
generating assessable income seen to take place in conducting the business activities and the
amount of the same are seen to be deductible as per “subsection 51 (1) of the ITAA” (Meng,
2014).

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The liability associated to the Fringe Benefit Tax for Shine Homes have taken place
with the various types of the common wealth legislations. As per “section 5 of the Fringe
Benefit Tax Act 1986”, tax is seen to be generally imposed based on the various
considerations made as per the FBT of an employer outstanding in a particular year. As
per the reference “Tubemakers of Australia Ltd v. FC of T 93” the fringe benefit sum
needs to be composed with the total amount incurred with the numerous FBT provided to
Charlie by Shine Homes (D’Ascenzo, 2015).
As per the given scenario, it has been further seen to be evident that the consideration
various types of the expenses such as honeymoon accommodation, parking fees, hiring
cost and the expenses incurred in producing or gaining of the taxable income. The main
consideration of this has been seen with the compliance with “subsection 51 (1) of the
ITAA 1997” and the expenses which has taken place in gaining or produced with the
assessable income for carrying of a business and this needs to be considered with the
deductible expenses (ATO, 2016).
Conclusion
The important considerations of the study have been able to highlight on the different
types of the benefits based on fringe benefit and the same is seen to be taxable as per “FBT
Act 1986”. The study has been further able to show the relevant case laws and sections
which is related to the car fringe benefit. The use of the vehicle by Charlie has been
constituted on accordance to the production of the assessable income from the employee and
the same is seen to attract high amount of “Fringe Benefit Tax”.

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https://www.ato.gov.au/Business/Luxury-car-tax/
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from https://www.ato.gov.au/Business/GST/Registering-for-GST/
Australian Taxation Office. (2015). Yearly reports and returns | Australian Taxation Office.
Retrieved from https://www.ato.gov.au/Business/Yearly-reports-and-returns/
Australian Trade Commission. (2015). Australian Business Taxes. Retrieved from
http://www.austrade.gov.au/International/Invest/Guide-to-investing/Running-a-
business/Understanding-Australian-taxes/Australian-business-taxes
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