T1 2019 HA3042 Taxation Law Assignment: FBT and Capital Gains Tax

This document is a solution to a Taxation Law assignment, specifically addressing Fringe Benefit Tax (FBT) and Capital Gains Tax (CGT) calculations. The assignment begins with an FBT calculation using both the statutory and log book methods, detailing the taxable value of fringe benefits, employee contributions, and the resulting FBT payable. The solution then proceeds to calculate Capital Gains Tax, considering the sale of a house, a painting, and shares. The calculations include net proceeds, cost bases, capital gains, and the application of a 50% CGT discount, ultimately determining the taxable capital gains and any carry-forward losses. The solution demonstrates the application of tax principles to real-world financial scenarios, providing a comprehensive overview of tax implications for various transactions.

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

1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to Question 2:................................................................................................................4

2TAXATION LAW
Answer to question 1:
Statutory Method:
Statutory method
Taxable value of fringe benefits
Particulars Amount ($) Amount ($)
Base value of the car 18000
Statutory rate 20%
Car Available for Private use (Days) 365
Number of days in the FBT year 365
Gross Taxable Value of the Car Fringe benefit 3600.00
Less: Employee Contribution 1000
Net Taxable Value of fringe benefits 2600.00
Log Book Method:
Operating cost method:
Taxable value of fringe benefits
Particular Amount ($) Amount ($)
Repairs 3300
Deemed Depreciation 4500
Deemed Interest 945
Fuel 990
Insurance 2200
Total operating cost 11935
Proportion of use for private purpose:
Total kilometre run 20000
Work related 14000
Private purpose related 6000
Percentage of private use 30%
Gross Taxable value of fringe benefits 3580.5
Net Taxable Value of fringe benefits 3580.5

3TAXATION LAW
Deemed Depreciation:
Calculation of Deemed Depreciation
Particulars Amount
Base value of car $18,000.00
Depreciation rate 25%
Deemed Depreciation $4,500.00
Deemed Interest:
Calculation of Deemed Interest
Particulars Amount
Base value of car $18,000.00
Statutory Interest rate 5.25%
Deemed Interest $945.00
Fringe Benefit Tax Payable:
Calculation of FBT
For the year ended 2018//19
Particular Amount ($) Amount ($)
Taxable value of car fringe benefits $3,600.00
Taxable value of total fringe benefits $3,600.00
FBT rate 49%
Fringe Benefit Taxable Amount $7,058.82
Fringe Benefit Tax $3,458.82

4TAXATION LAW
Answer to Question 2:
Calculations of Capital Gains Tax
For the year ended June 2019
Particulars
Amount
($)
Amount
($)
Capital gains from Doncaster House
Net Proceeds 85000
Less: Sales Commission 15000
Net Capital gains from Doncaster House 70000
Net Capital Gains on Sale of Painting
Proceeds from sell of Painting 125000
Cost base 15000
Gross Capital Gains (proceeds less cost base) 110000
50% CGT Discount 55000
Taxable Capital Gains 55000
Capital gains on sale of shares
Gross Proceeds from Shares in BHP 80000
Less: Brokerage Fees 750
Net Proceeds 79250
Cost base
Less: Acquisition Cost 75000
Add: Stamp Duty on Purchase 250
Total Cost Base 75250
Capital gains on sale of BHP shares 4000
Less: Carry-forward loss 10000
Net capital loss -6000
Net Capital gains 1,19,000