Employee Stock Options Treatment Tax Issuesâ€Myassignmenthelp.Com

Question: Discuss About The Employee Stock Options Treatment Tax Issues? Answer: Introducation It has been observed that Charlie worked as a real estate agent of the Shine Homes Pty Ltd. This is clearly obtained from the observed case study. A sedan was given to Charlie. The situation at hand comprised of the search of the fringe benefits which were to be provided by Shine Homes. The proper speculation was done in connection to Charlie as well. According to the Section 6 of the Miscellaneous Taxation Rulings and Fringe Benefit Tax Assessment Act 1986 it can be stated that there are situations in which the fringe benefits are levied on the specific cars. Laws: Section 6 of the Miscellaneous Taxation Rulings Fringe Benefit Tax Assessment Act 1986 taxation rulings of MT 2027 sub-section 136 (1) of the Miscellaneous Taxation Rulings of 2027 section 51 of the Income Tax Assessment Act 1997 Lunney and Hayley v FCT (1958) Newsom v Robertson (1952) 2 All ER 728; (1952) Simon in Taylor v Provan (1975) AC 194 Tubemakers of Australia Ltd v. FC of T93 Application: The Cars whose valuation Charlie requires need to be utilised in compliance with the sub-section 136 (1) of the Miscellaneous Taxation Rulings of 2027. This is due to the fact that the determination of the fringe benefits is important. The paragraph 3 of the Miscellaneous Taxation Ruling states that the business utilities of the specific cars need to be included in the important log books or any other type of file due to the business kilometres which have been travelled. The method of travel is that of the operating cost method. The car used by Charlie was for purposes of work for a distance of 50 kilometres as is evident from the case study. The taxation rulings of MT 2027 with reference to sub-section 136 (1) states that a particular type of utility created by the employees that is not totally connected to the production procedure of the taxable income can be considered as individual use. The case study clearly shows that the car was used for work purposes by Charlie for a distance of about 50 kilometres (Barkoczy, 2016). An important question under consideration is that the car was used by any associate wanting to get the employees assessable income exclusively or used by the employee himself. The FBT considers those cars used by the employees for purposes of employment as business use based on the sub section 136 (1). These are considered in employment cases and the levying of the taxes is also applicable in those cases (McLachlan, 2013). That Charlie used the car shows that the business is representative of the proper use of business in relation to the taxable income of the employee. The use of the car by Charlie was during his time of employment and was also related to the business purposes. This is bound to cause the FBT levy. The time of the use of the car is evident from the case study (Miller Oats, 2016). There are certain facts that have been considered as allowable deductions for the purposes of income tax. The section 51 of the Income Tax Assessment Act 1997, helps determine whether the car expenses are allowable to be deducted. The Lunney and Hayley v FCT (1958) discussed the points of view in those cases where an individual used a car for purpose of travel from his residence to the place of his employment. This will be considered as a private from of travel. Travel to work is thought of as a pre-requisite connected to the production of the assessable outcome at the time of actual earning of the outcome. The expenses incurred should comply with the Sub-division F of Division 3stated in Miscellaneous Taxation Rulings of 2027 which are connected to income tax issues. The expenses need to be considered as allowable deductions (Kaldor, 2014). In the form of a result it can be said that the distance in kilometres that Charlie actually travelled was strictly private. The operational outcomes were unable to be altered in any way due to use of the car by Charlie. The cost incurred by the barrister during the time of travel between the place he resided and his workplace would be considered as an expense based on the Newsom v Robertson (1952) 2 All ER 728; (1952). The travel in which Charlie engaged would be considered as travel for employment purpose as this comprised a major part of the individuals employment. This is because; travel was a major part of any individuals employment. This is in accordance with the Simon in Taylor v Provan (1975) AC 194. It can be said that the car use by Charlie was also partially for private use. The travel to ones place is thought of as business travel as the type of employment is nomadic by nature (Saad, 2014). Besides this, the employment duties of Charlie required him to work in more than one place. It is not unlikely for Charlie to claim the tax deductions related to work and also linked to the cost of petrol. It was used in the attainment of the assessable income depending on the FBT Act 1986. A car parking fringe benefit can arise in case the employer provides a car parking facility to the employee and the criteria are also met: The car parking time limit is not more than four hours The hiring or the total control of the car is done by the employee The discharge of employment duties are the reason why the car is provided to the employee A commercial parking space exists that charges a certain amount of fees for the car which is parked for the whole day within 1km range. The car is used by the employee at least once in a day for the travelling purposes either from work to home or vice versa. It is clear from the case study that the car parked by Charlie was under his control. The car was parked for which it was provided with a payment of $200 in each week. The car was utilised by him on a daily basis. This ultimately results in the fringe benefits for Charlie and Homes and the fringe benefits for parking fees can be claimed. It is evident that the accommodation fees are paid by Shine Homes. The honeymoon accommodations were paid by Shine Homes Pty Ltd in compliance with the Fringe Benefit Tax Act 1986, resulting in the tax liability. The Subsection 51 (1) of the Income Tax Assessment Act 1936 is utilised to claim the benefit for the taxpayers. The liability concerned with the FBT for Shine Homes can be thought of as legislation of Commonwealth. The expenses incurred by Shine homes in gaining assessable income would be considered as expenses of deductable nature under subsection 51 (1) of the ITAA 1997 (Bickley, 2012). Conclusion: Finally it can be said that the fringe benefit related expenditures will be considered for the purposes according to the FBT Act 1986. The car used by Charlie to be regarded as business entity for the gain in taxable income actually attracting the FBT References: Barkoczy, S. (2016). Foundations of Taxation Law 2016.OUP Catalogue. Bickley, J. M. (2012). Employee stock options: tax treatment and tax issues. Kaldor, N. (2014).Expenditure tax. Routledge. McLachlan, R. (2013). Deep and Persistent Disadvantage in Australia-Productivity Commission Staff Working Paper. Miller, A., Oats, L. (2016).Principles of international taxation. Bloomsbury Publishing. Saad, N. (2014). Tax knowledge, tax complexity and tax compliance