Remunerator News

Jan 22 2015

Save tax on Your Novated Lease by going on Holidays!

Save tax on Your Novated Lease by going on Holidays!

Did you know that if you go on a Holiday it may be possible that you can reduce the FBT payable on your Novated Lease Car based on the days that you could not drive your Car?

This particular situation is known as “Car Unavailability”.

To be eligible you need to keep your Novated Lease Car at your workplace while you are on holidays

Your FBT liability will be then reduced by any days deemed as being unavailable per 24 hour block

This will only be the case if you meet the following criteria:

•             The vehicle must be garaged on company owned or leased premises; AND

•             The employer removes the control of the vehicle from the employee (eg. holds the keys) and ensures the vehicle is not available for private use by the employee or a family member of the employee.

 

Case Study

Jane has a Novated Lease Car she purchased for $26,000.

Her Notional FBT for the Car is $5,200. Remunerator ensures that we structure her Salary package to ensure she doesn’t actually pay FBT.

This means she notionally accrues $100 of FBT per week =>$14.29 per day.

Jane is going to the Gold Coast for 2 weeks.

Jane leaves her car in the company car park at her office and leaves the keys with her HR Manager while she goes away.

The vehicle is kept there for the entire duration of her trip and not even her relatives use the car.

Two weeks later when Jane returns, she could make an unavailability claim for the 14 days where she was away.

Jane saves $14.29 x 14 = $200 in the cost of her Novated Lease Car which will be reflected in her reconciliation at the end of the Year!

 

How much can you save?