Division 7A & FBT

Q: A dwelling house is owned by a proprietary limited company in recently. It is proposed that the company would lease the property to its directors and shareholders (mother and father) for use as a residence. In case it is relevant, the property would not be the mother and father’s principal place of residence. The mother and father would pay an arm’s length market rental for the use of the property. Does it correct that while the provision of the residence would constitute a payment for Div 7A purposes, whenever an arm’s length market rental is paid, the amount of the payment is nil under s 109CA (11) of ITAA 19367? If the mother and father are not employees of the company, is there any other revenue consequence arising from the proposed residential lease?

Salary sacrifice & FBT

Q:  For a not-for-profit business that offers salary sacrifice to its employees, if the salary sacrifice amount is under the exemption threshold of $30,000 per annum, is it required to enter an amount of reportable FBT on the employees’ PAYG payment summary?

Pay FBT on the subcontractor’s car benefit?

Q: A client provides car fringe benefits to a subcontractor who perform his duties within the business of the client and bears no risk in respect of the duties he performs. The payment to the subcontractor is subject to payroll tax. Does the client need to pay FBT on the subcontractor’s car benefit?

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