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Base value of the car by example

Enthusiast

Views 317

Replies 1

Hi,

I use statutory formula to calculate FBT. In this scenario the car price is $20,000 Inc GST and the employee provides her own car valued

as $12,000 in this trade-in sales. In addition she pays $2000 cash of her own funds to the seller.

 

What is the base value of the car as requested in this page. Should the sales contract stipulate all these transactions for ATO purposes?

 

Thanks

Ray

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @rshdwork,

 

It depends on if the trade-in and cash were paid direct to the seller, or paid to the employer.

 

Where the employee makes a trade-in or cash payment as part of the sale agreement, the cost price is the purchase price minus that contribution. If it was paid to the seller, generally these details would be included in the sales contract.

 

Where an employee pays the amount to the employer, the employer will need to work out whether this payment is an employee contribution. If it is, it doesn't reduce the cost price of the car. In order to maintain good record keeping, you should make sure you keep note of all transactions that happen as part of this.

 

You can see this outlined in our fringe benefits tax - a guide for employers chapter on car fringe benefits.

 

Hope this clarifies it, Ray! Smiley Happy

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @rshdwork,

 

It depends on if the trade-in and cash were paid direct to the seller, or paid to the employer.

 

Where the employee makes a trade-in or cash payment as part of the sale agreement, the cost price is the purchase price minus that contribution. If it was paid to the seller, generally these details would be included in the sales contract.

 

Where an employee pays the amount to the employer, the employer will need to work out whether this payment is an employee contribution. If it is, it doesn't reduce the cost price of the car. In order to maintain good record keeping, you should make sure you keep note of all transactions that happen as part of this.

 

You can see this outlined in our fringe benefits tax - a guide for employers chapter on car fringe benefits.

 

Hope this clarifies it, Ray! Smiley Happy