Hi,
I would like to know the FBT on the below benefit provided to an employee. Company has a car which is fully depericiated and has nil value in the balancesheet. Company has transferred it to employee for free. It has a market value of $20,000 on the day of transfer. What would be fbt on above transfer?
I believe benefit provided should equal to Market value even though the value of car in balance sheet is NIL. Pleae advise. Thanks
Company is deemed to have disposed of the car for $ 20,000.
Supplied to employee for $ 20,000, but employee not expected to pay.
This sounds like a debt waiver fringe benefit = $ 20,000.
or maybe just a simple discounted goods fringe benefit.
WDV is not relevant, except for treatment of $ 20 K as a balancing charge.
Company is deemed to have disposed of the car for $ 20,000.
Supplied to employee for $ 20,000, but employee not expected to pay.
This sounds like a debt waiver fringe benefit = $ 20,000.
or maybe just a simple discounted goods fringe benefit.
WDV is not relevant, except for treatment of $ 20 K as a balancing charge.
Thank you very much, Bruce4Tax for your advice and time. Much Appreciated. Thanks
@Bruce4Tax Thanks again for your advise. What would be the joirnal entry for the balancing charge? I am struggling to find what to credit when recording 20,000 MV as other income. Please advice.
Entry 1. Depreciation Dr 20,000
Fixed Aseets cr. 20,000
(Sale of fully writtendown assett
2. Journal entry for balancing charge.
Other income Dr. 20,000
Cr ?????
(Selling assett for free at MV 20,000)
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
5,151 views
4 replies