𝐖𝐚𝐧𝐭 𝐭𝐨 𝐛𝐮𝐲 𝐚 𝐜𝐚𝐫 𝐢𝐧 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬?

A lot of people ask if they can buy a car using their company (or trust). My simple answer is always…. Yes!!, 

However…… there are a few things to consider.

• What sort of vehicle you are buying?
• Is there Fringe Benefits Tax on the vehicle?
• What is the purchase price of the vehicle?
• How much GST can be claimed on the purchase?
• What are the tax deductions associated?
• Do you use cash or finance the purchase?

𝑾𝒉𝒂𝒕 𝒔𝒐𝒓𝒕 𝒐𝒇 𝒗𝒆𝒉𝒊𝒄𝒍𝒆 𝒂𝒏𝒅 𝑭𝒓𝒊𝒏𝒈𝒆 𝑩𝒆𝒏𝒆𝒇𝒊𝒕𝒔 𝑻𝒂𝒙 (𝑭𝑩𝑻): 

Buying a workhorse vehicle (ute, van, etc..) can potentially be exempt from FBT. If you are more interested in buying the latest SUV, this is subject to FBT. So how much is FBT? The most common method of Fringe Benefit calculation for a car is 20% of the GST-inclusive purchase price. 

For example, the current listed price of a Toyota Prado Kakadu is $94,916. The FBT calculation is

Fringe Benefit Amount is calculated:$94,916 x 20% = $18,983.20 

Gross up for tax calculation :$18,983.20 x 2.0802 = $39,488.85

Tax amount is: $39,488.85 x 47% = 18,559.76

Your annual Fringe Benefits Tax amount on the Prado is $18,559.76. Every year you own the vehicle, this is the tax you pay for owning it in a company (or trust). There are ways to reduce this.

Next week I will discuss the remaining questions.