Example 2
Anglesey Wools Limited buys a motor vehicle for $20,000 GST- inclusive to be used exclusively by one of the employees.The company is registered as an annual filer. To show the ongoing FBT liability the example is for a period of five years. It is assumed that the employee does not pay anything towards the benefit received.
| Year | Cost price $ | Taxable value of benefit $ | Tax book value $ | Taxable value of benefit $ |
|---|---|---|---|---|
| 1 |
20,000
|
4,000
|
20,000
|
7,200
|
| 2 |
20,000
|
4,000
|
12,800
|
4,608
|
| 3 |
20,000
|
4,000
|
8,192*
|
3,000
|
| 4 |
20,000
|
4,000
|
5,242*
|
3,000
|
| 5 |
20,000
|
4,000
|
3,355*
|
3,000
|
| Total payable |
20,000
|
|
20,808
|
|
Notes
Cost price calculation to obtain value of benefit:
|
|
|
|
Tax book value calculation to obtain value of benefit:
|
|
|
|
Tax book value has been calculated using 36% diminishing value depreciation rate.
* Minimum value of 8,333 must be applied to all vehicles which are calculated on the tax book value option, regardless of the value recorded in the companies depreciation schedule.
© Copyright 2012 Inland Revenue