Escape Vacations Pty Ltd is a Perth holiday destination company that sells holiday packages.
(a) Joyce, is an Australian resident for tax purposes and is employed at Escape Vacations as a Marketing manager. Joyce has two kids, namely Zari and Luke. The following details were either included in Joyce's contract of employment or agreed with her for the full FBT year with Escape Vacations:
1. Salary of $150,000 plus a superannuation benefit of 9.5%.
2. Payment of Zari's and Luke's school fees, $15,000 each per year. The school fees are GST free.
3. As Joyce is a Marketing manager,she was required to travel to six potential clients per year to select holiday destinations, which had cost Escape Vacations $40,000 including GST.
4. $750 paid to the Marketing Institute of Australia forJoyce's professional membership, GST inclusive.
5. Use of a car, which travelled 20,000 kms for the year. Since Joyce had personal use of the car, she was required to contribute $150 per month. Based on the car's log book details, Joyce had used the car privately for 8,000 kms during the year. The car was leased by Escape Vacations from1 July 2015 at $600 per month, when the car was for sale at $35,000 including GST. Other expenses relating to the car paid by the Company for the year including GST: Fuel per month $200 Servicing $300 Registration $750 Insurance $700
6. Escape Vacations pays $24 per month towards Joyce's gym membership, including GST.
7. Payment of $75 (including GST) towards Joyce's mobile phone which she uses solely for work purposes.
8. An IPad which had cost Escape Vacations $1,100 (including GST).
9. Entitlement to a Virgin Airlines Gold Membership lounge to the value of $550, including GST, which Joyce also uses on private trips. 80% of her trips during the year were of a business nature.
10. Joyce was provided with a loan of $22,000 on 1 July 2016 at zero interest rate, which she had used to renovate her main residence.
Joyce was paid a bonus of $12,000 after tax on 31 December 2016 which was deducted from her salary to repay part of the loan. On 28 February 2017 Joyce became the Marketing director of the company and Escape Vacations advised Joyce thatshe was no longer required to repay the remaining balance.
(i) Analyse the above transactions and determine whether there are any FBT or income tax implications.
(ii) Calculate the FBT liability for the FBT year.