For practical reasons, company and business cars are often owned by one or more entities, however the Fringe Benefits Tax (FBT) regime requires that the FBT recoupment for the car is brought to account in one of the group entities.

Here are our FAQs (Frequently Asked Questions) concerning this:

Q: Why does the ATO require the FBT recoupment to be brought to account or paid by any group entities?

A: To avoid individual companies or trusts within a group trying to salary package benefits to team members and avoid FBT by arguing the car (or other fringe benefit) is being provided by a different entity to the entity employing the staff member i.e. the benefit is not "in consequence of their employment".  At the end of the day, if any entity in a group employs a person and that person receives any benefit, then it needs to be brought to account within the group.

Q: Can any group entity pay expenses or car loans etc?

A: Yes, as long as the FBT recoupment is made in one of the group entities, then it is irrelevant which entity owns the car, pays the chattel mortgage/loan and/or car expenses.

Disclaimer: This information is general in nature and is not an opinion expressed by us. So, before acting on this or any other information, it is important to seek professional advice related directly to you and your circumstances.  Should you require our assistance, contact your Primarius Team leader, or email us at info@primarius.net.au

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