I have a couple of questions regarding the tax treatment of rental expenses and motor vehicles, and I would appreciate your guidance.
1. Rental Expenses and FBT
For a property used 50% for business purposes and 50% for private use by an employee, after paying Fringe Benefits Tax (FBT) on the private use portion, I understand that the FBT paid is deductible for the employer. However, I wanted to clarify if the private portion of the rental expenses (e.g., 50% of the rent associated with the employee's private use) is still eligible for any tax deduction, or if the FBT covers this entirely and precludes the rental expense deduction for the private use portion.
Could you please advise on how to treat the rental expenses for private use after the FBT has been paid, and whether any portion of this is still deductible under income tax?
2. FBT and Depreciation for Motor Vehicles
Regarding motor vehicles provided to employees, if the FBT liability has been paid on the private use portion of the vehicle, can the employer claim 100% of the motor vehicle expenses (including the private portion) for depreciation and operating expenses?
Additionally, I would like to understand whether the car value (e.g., $100,000 excluding GST) is still subject to the car limit for depreciation purposes, or if the value of the car is fully claimable after FBT is paid.
Thank you in advance for your guidance and for helping me clarify these points.
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