Bankruptcy Regulations 1996

SCHEDULE 4 - MODIFICATIONS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986  

(regulation 6.12 )

3   Section 9 (Taxable value of car fringe benefits - statutory formula)  

3.1    
Subparagraphs 9(2)(c)(i) and (ii):

Omit the subparagraphs, substitute:

' (i)	for the first contribution assessment period:
	(A)	where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was more than 40,000 - 0.07; or
	(B)	where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was not more than 40,000 and not less than 25,000 - 0.11; or
	(C)	where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was less than 25,000 and not less than 15,000 - 0.20; or
	(D)	where the annualised number of whole kilometres travelled by the car during the year preceding the bankruptcy was less than 15,000 - 0.26; and
(ii)	for each subsequent contribution assessment period:
	(A)	where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was more than 40,000 - 0.07; or
	(B)	where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was not more than 40,000 and not less than 25,000 - 0.11; or
	(C)	where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was less than 25,000 and not less than 15,000 - 0.20; or
	(D)	where the annualised number of whole kilometres travelled by the car during the previous contribution assessment period was less than 15,000 - 0.26; ' .

3.2    
Paragraph 9(2)(d):

Omit the paragraph, substitute:

' (d)	the annualised number of whole kilometres travelled by the car during a contribution assessment period is:
	(i)	if records of the bankrupt show the number of kilometres travelled by the car during the year preceding that period - that number of kilometres; or
	(ii)	in any other case - the number of kilometres worked out in accordance with the following formula:

AB     C

;

		where:
		A	is the number of whole kilometres travelled by the car during the period (in this subsection referred to as the `holding period ' ) constituting that part of the contribution assessment period during which the provider held the car; and
		B	is the number of days in the contribution assessment period; and
		C	is the number of days in the holding period; and ' .

3.3    
Sub-subparagraph 9(2)(e)(ia)(B):

Omit the sub-subparagraph.

3.4    
Subsection 9(2):

Add at the end:

' Examples:

1. Assessment in the first contribution assessment period

 

A car is purchased in June 1994 for Christopher's use. The purchase price of the car is $20,000. During the period up to till 30 June 1995, Christopher uses the car on 200 days and travels 10,000 kilometres in that period. Christopher is declared bankrupt on 1 July 1992. His contribution to expenses is $300.

 

The annualised number of kilometres according to the formula

AB   C

 

is:

10 000   ×   365	= 18 250 kilometres
200

 

The figures to be inserted in the formula for calculating the value of the car benefit are:

A (base value): $20,000;

B (statutory fraction [ for 18,250 km.]): 0.20;

C (days when benefit provided): 365;

D (days in contribution assessment period): 365;

E (bankrupt's contribution): $300.

 

The value of the car benefit, according to the formula

ABC	- E
D

 

is:

$ 20 000 × 0.20 × 365	−   300   =   $ 3,700
365

2. Assessment in the second contribution assessment period

 

Suppose that the same car is provided in the second contribution assessment period for the use of the bankrupt, and that during the first contribution assessment period the car travelled 40,000 kilometres. The annualised number of kilometres for the second contribution assessment period is then 40,000 kilometres. Suppose also that the bankrupt's contribution remains $300. All figures will remain the same except the statutory fraction, which will be 0.11. According to the formula, the value of the benefit in the second contribution assessment period is:

$ 20 000 × 0.11 × 365	−   300   =   $ 1,900. ' .
365