In-kind luxury yacht trip with partner for business purposes - FBT yes or no?

 Author: JayATO(Community Support)Community Support

14 May 2026

Hi @thisisausername,

FBT doesn't apply to the yacht trip in this scenario because the client provided the yacht, accommodation and meals directly to the director, not the company. The company only paid for approximately one quarter of the flight costs, so FBT would only apply to that portion of the flights for both the director and their partner.

When a third party (the client) provides a benefit directly to an employee or director, it's not a fringe benefit from the employer unless there's an arrangement where the employer is involved in providing or reimbursing that benefit. In this case, the yacht experience was provided as part of the client relationship, not by the company as the employer.

For the flight costs paid by the company, you'll need to determine how much of the travel had a genuine work purpose versus a private purpose. The portion of the company-paid flights that relates to the partner's travel would attract FBT, as the partner wasn't there for work purposes. The portion relating to any private element of the director's travel would also be subject to FBT.

The fact that the director wouldn't have taken the trip without the client relationship doesn't change the FBT treatment. What matters is whether the company provided the benefit and whether there was a private component to what the company paid for.

You'll need to calculate the taxable value of the fringe benefit based on the actual cost the company incurred for the flights (approximately one quarter of the total flight costs) and apportion this between work and private use. Check out the common entertainment scenarios for business to understand how FBT applies to similar situations involving employees, associates and clients.

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