Is PHEV car exempt from FBT if novated lease is signed before 2024 but change employer after 1 April 2025 but the leasing company and all other arrangements stay the same
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Hi @Jazib
Usually, cars are FBT Exempt if they are a zero or low emissions car.
Although from 1st of April 2025 PHEV cars will not be considered a zero or low emissions car under FBT law.
However, you can continue to apply the exemption if both the requirements are met:
- Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025.
- You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.
We have an example on our electric cars exemption page about an employee with a novated lease for an electric car.
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Hi @Jazib
Usually, cars are FBT Exempt if they are a zero or low emissions car.
Although from 1st of April 2025 PHEV cars will not be considered a zero or low emissions car under FBT law.
However, you can continue to apply the exemption if both the requirements are met:
- Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025.
- You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.
We have an example on our electric cars exemption page about an employee with a novated lease for an electric car.
Can you confirm if an individual with an existing eligible PHEV lease with their old employer moves to a new employer (and the lease is transferred to new employer) after 1 April 2025 that the FBT exemption will continue to apply with the new employer? The lease would have to be transferred to the new employer so potentially changes the original commitment entered into prior to 1 April 2025.
Hi @Menage
As long as you meet the two conditions @TaraATO has mentioned. You'll be able to continue to apply the exemption.
According to the ATO website update on 8 Oct, any changes after 1 April 25 invalidate the ‘existing agreement’ clause. Change of employer, and even taking unpaid leave all invalidate the continuation.
This sounds like a no....... "You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding."
Firstly, not sure what is meant by "continue providing private use of the vehicle" I'm assuming this means continuing to use the vehicle for private use?
I suppose what we need to know is, when transferring to (possibly) a new NL provider after changing jobs, do they create a new agreement or do they just manage the same agreement?
Great Question, I also need to know this prior to engaging my Novated Lease.