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#61 | ||
Starter Motor
Join Date: Feb 2011
Posts: 22
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I currently salary sacrifice 2 vehicles that are 100% private use, I catch a train to work so my wife drives one and my daughter the other.
Here are the budgeted figures for these vehicles to give an idea of how the system currently works. Pajero VRX 2009 Estimated running costs (includes finance) $22,000 FBT (25,000k+ 11%) $6000 Total $28,000 Less company contribution ** $8,400 Total deducted from salary before tax $19,600 Residual after 3 years ~$25,000 (amount I can buy out vehicle) ** our company purchases vehicles rather than lease and can therefore claim 30% company tax as business expense Estimated running costs (includes finance) $10,400 FBT (25,000k+ 11%) $4,800 Total $15,200 Less company contribution ** $4,560 Total deducted from salary before tax $10,640 Residual after 3 years ~$10,000 (amount I can buy out vehicle) The change in FBT rules will impact my Pajero. One other option is to get a vehicle that is FBT exempt, in the past this was typically utes. In the area I work there are at least 9 of my workmates that recently salary sacrificed the base model Pajero. The ATO has ruled that this vehicle is also exempt, something to do with the fact it is only a 5 seater and not 7 like mine. As you can see that takes a large chunk out of the package straight away. Even though they get the base model they are still able to option them up with all the bells and whistles you get on the up market model. I personally will probably change to a ute as I want to tow a 5th wheel caravan, I will also avoid FBT altogether. If it was not for the way we salary sacrifice there is no way I would have over $100,000 worth of cars sitting in the driveway. Peter |
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#62 | ||
Noobie
Join Date: Jan 2007
Location: Brisbane
Posts: 525
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I didn't realise the base model Pajero was FBT exempt! Thanks for the tip.
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BrisVegas WS Fiesta Zetec 3dr NM Pajero TD LWB LS Focus Zetec 5dr - gone WS Fiesta Zetec 5dr - gone |
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#63 | ||
Long time lurking
Join Date: May 2007
Location: murtoa
Posts: 175
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Be careful using the fbt exempt vehicles, this provision only covers travel that is incidental to work ie travel to and from work. If you use an fbt exempt vehicle for any other private purpose then fbt will apply.
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BA Falcon XR8 Devil R - UA Everest Sport - Next Gen Ranger XLT v6 - BA Fairlane G220 |
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#64 | |||
FF.Com.Au Hardcore
Join Date: Nov 2009
Posts: 3,876
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#65 | ||
Critical Thinker
Join Date: Jan 2005
Location: Adelaide
Posts: 20,332
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Please excuse my lack of understanding on this, I may end up getting this wrong.
This is an interesting thread. Im in the throws of looking at the viability of salary sacrificing to get my first lease car. I currently do just over 25,000km with my private vehicle, which is a combination of private and business use. I use the log book method at the moment, and its about 50/50, not including driving to and from home to office. Would you guru's be saying that for it to become any where near viable for a lease vehicle under the NEW FBT, I would need to prove my usage via a log book method anyway, and also look at ways of justifying the 'business' portion of the vehicle? EDIT: I just got off the phone with my accountant and he has assured me, it wont affect my business or the lease of a vehicle all that much.
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"the greatest trick the devil pulled, is convincing the world he doesn't exist" 2022 Mazda CX5 GTSP Turbo 2018 Hyundai Santa Fe Highlander 1967 XR FALCON 500 Cars previously owned: 2021 Subaru Outback Sport 2018 Subaru XV-S 2012 Subaru Forester X 2007 Subaru Liberty GT 2001 AU2 75th Anniversary Futura 2001 Subaru GX wagon 1991 EB XR8 1977 XC Fairmont 1990 EA S Pak 1984 XE S Pak 1982 ZJ Fairlane 1983 XE Fairmont 1989 EA Falcon 1984 Datsun Bluebird Wagon 1975 Honda Civic Last edited by blueoval; 10-05-2011 at 05:14 PM. |
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#66 | ||
Turbo Falcon Fiend
Join Date: May 2005
Location: Far West NSW
Posts: 3,205
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I am currently in the 40,000k+ 7% bracket. My lease is 100% private, though I do use the car for work when it suits me at no cost to my employer. I hope the existing leases are grandfathered or my lease is going to go from being a great deal to a really bad deal.
New car sales will suffer, I dont think people will be as keen to pay for servicing and tyres through the nose either so there are a number of industries in the periphery that will take a hit. The near new car market will also take a hit. I would not be driving the FG F6 if it was a 100% out of pocket cost to me. So the $1900 in insurance I pay would be reduced to a far lower amount. I will buy a hyundai I30 td if this happens.
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Too many turbo toys...... 2009 FG F6 Nitro LPI LPG 290rwkw on LPG. 2005 BAMKII XR6 Turbo with LPG (ex HWP 255,000k's and counting) Honda 2001 CR500E Road registered CR500 Honda 1985 CR500 (the one with the arm ripping power) DT200r regoed Hack Yamaha IT/YZ 465 Vinduro rocket Imported IT465 and 490 back up bikes VF1000R mid 80's racer built by HMR Honda CR480 Air cooled project road cafe racer. T88 Turbo XT Falcon project with 351 Cleveland (mothballed) Plus the rest. . |
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#67 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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Tax breaks timing to skew car market: FCAI
http://www.goauto.com.au/mellor/mell...25788C000EE62F Quote:
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Daniel |
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#68 | |||
FF.Com.Au Hardcore
Join Date: Jan 2010
Posts: 11,288
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#69 | |||
FF.Com.Au Hardcore
Join Date: Nov 2005
Posts: 1,013
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#70 | |||
FF.Com.Au Hardcore
Join Date: Feb 2007
Posts: 584
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#71 | |||
FF.Com.Au Hardcore
Join Date: Feb 2007
Posts: 584
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#72 | |||
Regular Member
Join Date: Aug 2008
Posts: 2,884
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#73 | ||
FF.Com.Au Hardcore
Join Date: Nov 2005
Posts: 1,013
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thanks 2008WhiteSR and devilcv8, i'm locked in for another 2 years and don't earn anywhere near 180K. i'll really have to think hard if its worth getting another car after the end of the lease, maybe i'll go back to a nice e series
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#74 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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Car FBT 20 per cent flat rate ‘a tax grab’
http://www.goauto.com.au/mellor/mell...25788D00135972 Quote:
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Daniel |
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#75 | ||
Beautiful in Black
Join Date: Jan 2011
Location: Glenmore Park NSW
Posts: 93
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good news - this would've been disasterous had I been slugged to 20% now with 3years 10months left to go on my contract
the only bad news for me is because of this change this will probably be my last lease ... oh well, at least I'm planning for this one to be a keeper ![]()
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Current Ride:
FG FPV F6 Ute #308 My Ford heritige prior to the FPV: BA MkII Classic | AUII S Pack | EL Futura |EFII Classic XF Fairmont Ghia | XE S Pack |
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#76 | ||
Critical Thinker
Join Date: Jan 2005
Location: Adelaide
Posts: 20,332
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So if I went and got a lease car NOW, would I be under the new laws of 20% if I did less than 25,000km?
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"the greatest trick the devil pulled, is convincing the world he doesn't exist" 2022 Mazda CX5 GTSP Turbo 2018 Hyundai Santa Fe Highlander 1967 XR FALCON 500 Cars previously owned: 2021 Subaru Outback Sport 2018 Subaru XV-S 2012 Subaru Forester X 2007 Subaru Liberty GT 2001 AU2 75th Anniversary Futura 2001 Subaru GX wagon 1991 EB XR8 1977 XC Fairmont 1990 EA S Pak 1984 XE S Pak 1982 ZJ Fairlane 1983 XE Fairmont 1989 EA Falcon 1984 Datsun Bluebird Wagon 1975 Honda Civic |
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#77 | ||
Solution Was Boost 4?, 6 & 8
Join Date: Dec 2004
Location: Melbourne
Posts: 23,624
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Sent to me by a company called Prosperion
The 2011 Federal Budget was released last night with one announcement of particular interest to us and our clients. What’s changed? The Statutory Method for calculating FBT on cars will change to a flat Statutory Rate of 20%, regardless of how many kilometres you travel. Previously the further you travelled, the more you received in tax benefits. When does it take effect? These changes only apply if you sign up for a new novated lease after 7:30pm (AEST) on 10 May 2011, the old rules will continue to apply to your existing novated lease. The changes will be phased in over the next four years, but our system will automatically smooth the introduction into one set of deductions that will apply for the duration of your novated lease. Is the Operating Cost (Log Book) Method affected? The Operating Cost Method (commonly known as the Log Book Method) remains unchanged. Will novated leasing still be worthwhile? There will still be significant tax benefits from novated leasing, but for some situations the tax benefits may reduce or even increase depending on how many kilometres you travel per annum: Less than 15,000 km: Increased tax benefits More than 15,000 km: Same tax benefits More than 25,000 km: Reduced tax benefits Operating Cost (Log Book) Method: Same tax benefits For Example: someone driving 25,000 km per annum in a $30,000 car could have previously saved $5,900 but will still save over $4,600 each year under the proposed 20% flat Statutory Rate. Have you got any tips to maximise the tax benefits I can get moving forward? It’s time to look at the cars in your family that you didn’t think were “worth” putting on a novated lease. It is quite likely that by putting another family member’s car on a novated lease under your name as well, you will more than recover any tax benefits that you’ve lost as a result of the changes. Remember that there is no requirement for you to be the one who actually drives the car. Should I use the Operating Cost Method instead for a new novated lease? If you are getting a new novated lease (remember your current novated lease is not affected by the changes) and you travel more than 25,000 km per annum you may want to consider the Operating Cost Method. If you can substantiate more than 40% business use with a log book kept over 12 weeks, then this may provide more tax benefits. Please contact one of our Client Service Seniors to put together some estimates for you comparing the two methods. What if I just keep extending my existing novated lease? Our understanding at this time is that the new rules will apply to any existing novated leases that are extended after 7:30pm (AEST) on 10 May 2011, as it is effectively signing a new finance lease. Will recalculations of the running cost budgets or kilometres travelled on my existing novated lease be affected? So far it seems that these will not be affected as these situations are only changing the deductions from your salary or the amounts set aside for your running cost budgets. The actual novation agreement and finance lease remain the same. What if I transfer my existing novated lease to a new employer? The new rules will apply because you will be signing a new novation agreement, even though the original underlying finance lease is still in place. So in summary, what’s the good news? There’s no longer any minimum kilometre requirement for new novated leases. For cars travelling less than 15,000 km per annum, they will get more tax benefits. Look at other cars in your family that you can put on a novated lease as well. For cars travelling between 15,000 and 25,000 km per annum, they will get the same tax benefits. The Operating Cost (Log Book) Method remains unchanged and may benefit some people travelling more than 25,000 km per annum. It is important to note that this is our understanding at this time and we are yet to see the proposed legislation itself. Given our current minority government, there is even a chance that it may not get enough support to become law. We will keep you posted as to any further developments as more information becomes available. How can I find out more? If you have any further queries or would like to see some payroll estimates on how the proposed changes may affect your personal situation, please don’t hesitate to contact us on (02) 8905 5100 and speak with one of our Client Service Seniors. Best regards Team Leader – Client Services
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AUTOTECH TUNED EDELEBROCK CHARGED 2017 GT Mustang Plenty of RWKW |
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#78 | ||
Critical Thinker
Join Date: Jan 2005
Location: Adelaide
Posts: 20,332
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Thanks Mark. That explains my questions pretty much.
Under my circumstances, looks like it won't affect me greatly regardless if I was on the old or new system. In fact I think it will be better off for me now. I currently do between 20,000-25,000km now as it is. So if I get a lease car under $30k worth, I will be under the 20% FBT bracket on the new system as opposed to 26% on the old system. As I understand it, it means I don't need to flog the km's on the car to try and reach a lower FBT bracket. I would be better off doing the same km's as Im doing now.
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"the greatest trick the devil pulled, is convincing the world he doesn't exist" 2022 Mazda CX5 GTSP Turbo 2018 Hyundai Santa Fe Highlander 1967 XR FALCON 500 Cars previously owned: 2021 Subaru Outback Sport 2018 Subaru XV-S 2012 Subaru Forester X 2007 Subaru Liberty GT 2001 AU2 75th Anniversary Futura 2001 Subaru GX wagon 1991 EB XR8 1977 XC Fairmont 1990 EA S Pak 1984 XE S Pak 1982 ZJ Fairlane 1983 XE Fairmont 1989 EA Falcon 1984 Datsun Bluebird Wagon 1975 Honda Civic |
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#79 | |||
GT
Join Date: Apr 2005
Location: SYDNEY
Posts: 9,205
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#80 | ||
Regular Member
Join Date: Apr 2008
Posts: 146
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Even if it is 12%, your lease payments are coming out of your pre-tax, so after tax (assume 40% marginal rate) you will actually be wearing only about 7.2%, which is pretty close to what most people would be paying on their homes right now.
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#81 | ||
FF.Com.Au Hardcore
Join Date: Mar 2010
Posts: 614
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started reading with interest, but my attention span is such that after about 40 posts i was meh...
if these changes are as i read in the first few posts, then my current novated lease car will be my last brand new car for a while. i suspect i am not alone in that thought, so where does that leave the car industry??
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Ex-ride: 2010 MB Mondeo - Panther Black - Just a little bit modified ![]() New ride: 2010 LV Focus XR5 - Moondust Silver - More mods than you can poke a stick at ![]() |
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#82 | ||
Donating Member
![]() Join Date: Mar 2007
Location: Heading thru Hell (Corner)
Posts: 8,211
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I think I know the answer to this, but thought somone more in the know than me could positively answer it.
All the documentation on the change in FBT rate that I have seen refers to Novated leases. Does this change also affect Associate leases? Thanx Craig H
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Labels are for jars, not for people. Life is a journey, not a destination. ~~~~~~~~~~~~~~ Daily: 2013 FGII EcoLPi in Winter White Play: 2015 FG X XR8 in Emperor Show' N Shine thread Gone, but not forgotten: 2015 SZII petrol Titanium Territory in Emperor |
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#83 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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http://theage.drive.com.au/motor-new...513-1ekys.html
Quote:
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Daniel |
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#84 | ||
Regular Member
Join Date: Oct 2006
Posts: 48
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With my FBT increasing by 285% (I do over 40,000klm), I sure as hell wont be supporting the new car industry after this lease. A little saving grace is that with current leases, they may stay under the old FBT brackets if they are extended as they remain an old lease contract.
I see a lot of people moving to FBT free utes to get out of the latest tax grab. |
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#85 | ||
FF.Com.Au Hardcore
Join Date: Feb 2006
Posts: 1,224
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Apologies for taking this slightly off topic, but i didn't want to start a whole new thread when this one has so much info! Can one of you lads with more experience with leasing give me some insight... I'm considering taking up a lease for a new FPV GS sedan, and as i'll only do about 20,000km i figured the new changes won't affect me too much.
I'm just wondering if some one can tell me if i have these figures correct, or if i'm way off the mark. At present, my net weekly pay is about $1500 (approx 105k PA). The lease looks like it'll cost me about $1800-1900 per month pre tax. Am i correct to assume that it'll therefore bring my taxable income down to about 84k? Having looked at some income tax calculators, this means my weekly net pay will be just shy of $1300, so in effect the lease is costing me about $200 of my net pay per week, or about $800-1000 per month. Is this correct? or am i missing something? I think i might be getting confused with how much it brings my taxable income down, especially if i opt for the ECM method? It almost seems too good? As repayments alone on a 50k car are about $1000 per month without any running costs! So, how far off the mark am i? ![]() Cheers, Jimmy |
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#86 | |||
Regular Member
Join Date: May 2010
Posts: 316
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Quote:
Assuming an FBT cost base of 50k, you'll be up for an extra 10k in FBT per year - this comes out of your pay after income tax. So, assuming your tax figures are correct) you'll be hit 192.31 per week. So your net pay will be closer to 1100. Around a 21k per year cost. |
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#87 | |||
FF.Com.Au Hardcore
Join Date: Feb 2006
Posts: 1,224
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Quote:
So in a round about way, your figures are correct are correct Dave. So in real figures, my net pay will drop from about $1500 to about $1100 per week... That doesn't sound quite as appealing anymore! Might still go see a professional and get some advice though. |
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