Example 1
Anglesey Wools Ltd buys a motor vehicle for $80,000 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 this 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 $ |
|---|---|---|---|---|
| 1 |
80,000
|
16,000
|
80,000
|
28,800
|
| 2 |
80,000
|
16,000
|
51,200
|
18,432
|
| 3 |
80,000
|
16,000
|
32,768
|
11,796
|
| 4 |
80,000
|
16,000
|
20,971
|
7,549
|
| 5 |
80,000
|
16,000
|
13,421
|
4,831
|
| Total payable |
80,000
|
71,408
|
||
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
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