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FBT issue on the ATO’s radar

The ATO has updated its list of ‘What attracts our attention’, with six items the specifically relate the fringe benefits tax (FBT), as follows:

FBT: Record-keeping exemption threshold 

The exemption threshold for the FBT year commencing 1 April 2019 is $8,714 (up from the amount of $8,552 that applied in the previous year).

FBT: Benchmark interest rate 

The benchmark interest rate for the FBT year commencing on 1 April 2019 is 5.37% per annum (up from the rate of 5.20% that applied for the previous FBT year). This rate is used to calculate the taxable value of:

Example

On April 1 2019 an employer lends an employee $50,000 for five years at an interest rate of 5% p.a. with interest charged and paid six-monthly, and no principal being repaid until the end of the loan. The actual interest payable by the employee for the current year is $2,5000 (i.e. %50,000 x 5%). However, the notional interest, with a 5.37% benchmark rate, is $2,685, so the taxable value is %185 (i.e. $2,685 – $2,500).

The Money Edge | Bundaberg

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