Changing Employers - Novated Lease - Unused (Pre-tax) Funds
With an existing novated lease, a person is changing employers. The vehicle is managed by the original employer specified 3rd party management company ('A') that manages each of the employee novated leases.
There are two scenarios:
(1) The employee transfers to a new organisation (that is related to the original organisation)
(1) The employee transfers to a new organisation (that is not related to the original organisation)
In both situations, the:
- car will continue to be paid for under a novated lease arrangement with the new employer, and
- there are unused pre-tax funds (deducted from the employee's salary) that has accumulated for upcoming car expenses.
- no pre-tax funds will be made available directly to the individual (car owner/driver)
The desire is to have the already set aside pre-tax funds (held by the 3rd party management company 'A') to continue to be used for the car expenses under a novated lease arrangement and at no time made available to the individual (unless for a reimbursement for expenses incurred during employment under a novated arrangement).
The scenarios are:
(1) Where the 3rd party management company 'A' manages the novated lease vehicles at both the old and new employer, the existing unused funds continue to be used for the management of the car.
(2) Where the 3rd party management company 'A' DOES NOT manage the novated lease vehicles at both the old and new employer, as the new employer uses a 3rd party management company 'B'
In both situations, can the current unused pre-tax funds - which have been set aside for the ongoing car expenses, which are not readily available to the car owner/driver - continue to be used for their intended purpose under a novated lease arrangement?
Where the management of the car continues under a novated lease arrangement with the new employer, can the unused set-aside funds (specific for the use of the car expenses), be transferred:
(1) from one 3rd party management company ('A') to the next 3rd party management company ('B')?
(2) from management company ('A') to the new employer (to onforward to their preferred management company) who will direct their preferred management company ('B') use the funds for the specified purpose of the car expenses under the novated lease arrangement?
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