Hi, I am purchasing a secondhand vehicle via a novated lease and the lease provider has told me the FBT base value is based on the market value of the vehicle, not the purchase price. The lease providers "market value" also seems inflated when compared to insurance companies "market value" when applying for quotes.
Is this correct, I can't find anywhere that specifies that the market value must be used for the FBT calculations.
Hi @cbr954
If they bought the car and leased it to you the base value would be the cost price. If they bought the car a different time then leased it to you they can use market value or the value someone would expect to pay if the deal is arms-length. Check out our FBT guide for more info about working out the base value.
Hi @cbr954
If they bought the car and leased it to you the base value would be the cost price. If they bought the car a different time then leased it to you they can use market value or the value someone would expect to pay if the deal is arms-length. Check out our FBT guide for more info about working out the base value.
Hi @AriATO
My employer isn't buying the car, it's a salary sacrifice novated lease. Do you know if that makes any difference?
"They" above, means the leasing company - they own the car and lease to you, then the employer takes responsibility for the payments under a deed of novation.
Thank you for the clarification. In that case, yes they the leasing company bought the car and are using market value instead of purchase price for the purpose of FBT. Not sure why but I'll try and find out why they think they need to do it this way.
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