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Hi @claire8
Good question! I had a look in our FBT guide for employers to find out.
It sounds like you've already claimed a full income tax deduction for the vehicle. Remember that income tax and FBT are separate, so they may not directly correlate. If you've depreciated it for income tax, but not FBT, then you'll need to check your FBT records.
For FBT, in years after the vehicles purchase, the depreciated value is its original cost reduced by the depreciation rate over the time it's been owned. If you complete this calculation for FBT and it's down to nil, then you won't need to. For example, let's say you bought a car in 2010 for $10k. The depreciation is 25% over 8 years, so its value is already zero before your employee starts using it under FBT in 2020. This means you won't need to depreciate it for FBT anymore, as its effective life is over.
You can read about this in our FBT guide for employers on our legal database.
All replies
Hi @claire8
Good question! I had a look in our FBT guide for employers to find out.
It sounds like you've already claimed a full income tax deduction for the vehicle. Remember that income tax and FBT are separate, so they may not directly correlate. If you've depreciated it for income tax, but not FBT, then you'll need to check your FBT records.
For FBT, in years after the vehicles purchase, the depreciated value is its original cost reduced by the depreciation rate over the time it's been owned. If you complete this calculation for FBT and it's down to nil, then you won't need to. For example, let's say you bought a car in 2010 for $10k. The depreciation is 25% over 8 years, so its value is already zero before your employee starts using it under FBT in 2020. This means you won't need to depreciate it for FBT anymore, as its effective life is over.
You can read about this in our FBT guide for employers on our legal database.
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