An Employer Owns a Boat (Large enough to sleep/Live on) and intends to stay on it for a period of time. If Employees or related parties us this boat how do we calculate the FBT Value in relation to its Private Use?
Hello @Josh22
Is the boat privately owned by the employer as an individual or owned through his business as a business asset ?
If it's the former and the boat is owned in the individual's name then FBT doesn't apply.
If it's the latter case then it would incur FBT and would fall into the category of residual fringe benefits.
In this case, assuming that the employer does not offer the use of his boat to clients in the normal course of his business, it would be an external residual fringe benefit.
If you refer to section 18.5 of the FBT guide I'd suggest the taxable value of the FBT payable in this case is as described in paragraph 2 of 18.5, i.e. the taxable value is the amount the employee could reasonably expect to pay to obtain the benefit under an arm's length transaction, reduced by any amount paid by the employee.
Making sense?
Let's consider an example - let's say the employer allows select employees to take the boat away on weekend trips, including overnight stays. Let's assume he doesn't charge them anything for fuel also.
Let's say that if they were to hire a similar boat it would cost them $1000 for the hire of the boat plus $250 for fuel.
Then the FBT amount to be used would be $1250 per trip.
Hello @Josh22
Is the boat privately owned by the employer as an individual or owned through his business as a business asset ?
If it's the former and the boat is owned in the individual's name then FBT doesn't apply.
If it's the latter case then it would incur FBT and would fall into the category of residual fringe benefits.
In this case, assuming that the employer does not offer the use of his boat to clients in the normal course of his business, it would be an external residual fringe benefit.
If you refer to section 18.5 of the FBT guide I'd suggest the taxable value of the FBT payable in this case is as described in paragraph 2 of 18.5, i.e. the taxable value is the amount the employee could reasonably expect to pay to obtain the benefit under an arm's length transaction, reduced by any amount paid by the employee.
Making sense?
Let's consider an example - let's say the employer allows select employees to take the boat away on weekend trips, including overnight stays. Let's assume he doesn't charge them anything for fuel also.
Let's say that if they were to hire a similar boat it would cost them $1000 for the hire of the boat plus $250 for fuel.
Then the FBT amount to be used would be $1250 per trip.
15 Apr 2026 · 4 min read time
16 July 2025 · 5 min read time
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