- December 3, 2015 at 9:20 pm #287360wajeehashahzaibMember
- Topics: 1
- Replies: 0
This is part of a question from Kaplan relating to employment income called “Rita”
Qs. Rita is provided with a company car. It had a list price of $18500 when new in august 2011 and has a carbon dioxide emission rating of 182g/km. Daring Designs Limited paid for all the mileage travelled by Rita until 5 December 2014.
On 5 December 2014 the company discontinued the company car scheme and sold the car to Rita for $5000, its market value at that date.
1) There is a car benefit for 8 months calculated as: 18500* ((180-95)/5)*1%+12%*(8/12)= 3,577
2) There is a fuel benefit of 21,700*29%*(8/12)= 4195
3) Acquisition of car:
Higher of ;
– M.V. at acquisition by employee = 5000 or
– Original M.V. at acquisition – benefit already taxed= 18500-3577 = 14923 -5000(already paid by the employee)
Now the issue I have is that the solution in Kaplan does not include the benefit derived by the employee when acquiring the car. I don’t understand why. Please helpDecember 5, 2015 at 10:01 am #287779unstopabl3Member
- Topics: 8
- Replies: 121
Firstly, I think you are not calculating the values correctly on the Gift of Asset, as you are supposed to deduct all of the taxed benefits since providing the car till the sale.
Secondly, in case of gift of car we always take the M.V when sold to employee less contribution as this gives higher value always.
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