Changes to FBT rules affecting in-house benefits
26 October 2012
The change announced by the Government today in the Mid-Year Economic and Fiscal Outlook 2012‑13 will apply:
from 22 October 2012 for salary sacrifice arrangements entered into from 22 October 2012, and
from 1 April 2014 for salary sacrifice arrangements entered into prior to 22 October 2012.
According to the Government the existing FBT concession was introduced before the widespread use of salary sacrifice arrangements. This measure will return the use of this FBT concession to its original intent. Under this measure, the taxable value of in house fringe benefits provided through a salary sacrifice arrangement will be either the lowest price at which an identical benefit is sold to the public or under an arm's length transaction, depending on the nature of the benefit.'
Prior to the announcement under the existing FBT concession, the taxable value of in house fringe benefits is 75 per cent of either the lowest price at which an identical benefit is sold to the public or under an arm's length transaction, depending on the nature of the benefit, reduced by a further $1,000 per employee per FBT year.