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CGT and options – when is the asset acquired?

There was a recent case before the Federal Court which had to deal with the issue of when is an asset acquired for CGT purposes when an option is exercised to acquire it.

Is it at the time the option agreement is entered into or is it when the option is exercised?

And it is an important issue for the person who acquires the asset.

For example, it may affect their ability to use the 50% discount on a subsequent sale of the asset which requires a 12 month holding period – or it may trigger the rule that prevents the discount from being used if an agreement to sell an asset is entered into within 12 months of acquiring it.

It is also an important issue for the person who sells the asset when the option is exercised – and for similar reasons.

In that Court case, the Court confirmed the Commissioner’s views that the time of disposal is when the subsequent contract to sell the asset is entered into following the exercise of the option – and not when the option agreement itself is entered into.

So, if for example you enter into an option agreement to buy land on 1 April 2026 and then exercise that option 6 months later on 1 September 2026, then you will be considered to have acquired the land when you exchange the written contracts drawn up to effect that sale.

And this is all because the CGT rules generally say that an asset is acquired when the contract for its sale or disposal is entered into (or if no contract, when the change of ownership occurs).

Of course, this result may have adverse consequences for the acquirer (as suggested above).

However, all may not be lost.

This is because there is High Court authority* that says that an option agreement is itself a “conditional contract” and that when the option is exercised this condition is met. And therefore, the relevant contract is the option agreement not any later sale contract entered into

Therefore, for CGT purposes it is arguable that the relevant contract for the sale or disposal of the asset is the original option agreement itself.

However, this goes against the ATO’s stated position (and also some tribunal cases).

So, if you have entered into an option agreement to buy or sell an asset, or are intending to do so, you should come and speak to us first.

  • Laybutt v Amoco Australia Pty Ltd [1974] HCA 49
2026-05-07T04:47:51+10:00May 7th, 2026|
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CGT relief if an asset is lost or accidentally destroyed

The capital gains tax (CGT) rules provide a lot of important concessions where a capital gain arises in unusual or unexpected circumstances.

One such concession is the rollover where a CGT asset (or part of one) is lost or accidentally destroyed.

This typically occurs where a natural disaster occurs (eg flood, fire, cyclone etc) which results in the destruction of an asset – such as an investment property, a commercial building etc. And, importantly, this includes the partial destruction of an asset (eg where a roof on an investment property or a commercial building is destroyed and has to be replaced)

The rollover may also occur where a CGT asset is stolen or where it is lost due to fraud. (But note that the ATO now takes the view that roll-over no longer applies where a broker accidentally sells your shares on your behalf.)

Under CGT principles these type of “destruction or loss” scenarios can give rise to an assessable capital gain because, in effect, the ownership of the asset has changed – even though this occurs accidentally or in circumstances outside the taxpayer’s control.

And this where the CGT rollover for “where an asset is lost or accidentally destroyed” steps in.

But, suffice to say, there are several key conditions to be met before the rollover can apply.

And the main one of these is that money (eg insurance or other indemnity) or a replacement asset is received in compensation for the loss or destruction of the asset. Importantly, in the case of money this must be applied in acquiring a replacement asset within a certain time period.

In this case, the capital gain that you would otherwise would have made as a result of the loss or destruction is disregarded – and the replacement asset you acquired is deemed to have the same cost for CGT purposes as the original asset.

However, there are important rules to be aware of where you receive money as compensation and you spend only some of it (or more than it) in acquiring a replacement asset. And this can give rise to an immediate capital gain or other CGT adjustments

These rules are messy and require the advice of an expert.

In the event, that the original asset was acquired pre-CGT (ie before the CGT regime was introduced) then any replacement asset will be taken to have been acquired pre-CGT also provided the cost of replacement asset is within certain thresholds or the replacement asset is substantially the same as the original asset.

Suffice to say the rules for qualifying for the rollover in the first place and their exact effect will depend on individual circumstances.

Moreover, they can be quite complex – depending on the circumstances – and require the advice of an expert.

So, if you find yourself in this situation make an appointment and come and speak to us as soon as possible so all the right steps can be undertaken to obtain this important CGT relief.

2026-05-07T04:46:53+10:00May 7th, 2026|
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Fuel response payment plan

Following a government media release on the same day, the ATO on 1 April 2026 announced that eligible taxpayers who are experiencing difficulties in paying their tax debts due to recent high fuel prices can apply to the ATO for a temporary fuel response payment plan.

An eligible taxpayer can apply for the ATO’s fuel response payment plan which has the following features:

  • no upfront payment;
  • a 3-year payment plan period of 36 equal monthly instalments;
  • the ATO will make a decision to remit any General Interest Charge that has accrued from the time of the application to the date of the third monthly instalment, provided the taxpayer has:
    • paid all instalments agreed under the payment plan for 3 months; and
    • brought any outstanding lodgements up to date in that period.

A taxpayer is eligible to apply if they are an ABN holder who meets all of the following four criteria:

  • They have experienced an increase in business operating costs, and these costs are either directly attributable to higher fuel costs, or indirectly attributable to high fuel costs because of increased transport, logistics or other supply chain costs.
  • They have a new tax debt or are unable to service an existing tax debt.
  • They can demonstrate a reduced capacity to pay due to the high fuel prices. This is separate from a general downturn in business or ordinary cash flow issues. It means that if fuel prices had not been so high, the taxpayer anticipates they would have been able to meet their payment obligations, including their instalments under existing payment plans.
  • Their lodgements are up to date within three months of the payment plan being put in place. The ATO may cancel the payment plan if lodgements are not up to date within this period. Up-to-date lodgements are also required for the ATO to make a decision to remit GIC under the fuel response payment plans.

The plan is available by application until 30 June 2026.

If you’re experiencing financial difficulties because of the spike in fuel prices due to the Middle East conflict, even indirectly, you may be able to benefit from the ATO’s fuel response payment plan. It may only be a deferral, but it could make a difference in these difficult times.

And if you’re not sure whether you’re eligible, or you need help in making an application, please don’t hesitate to contact us.

2026-05-07T04:45:21+10:00May 7th, 2026|
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Budget musings: Changes to negative gearing, the CGT discount on the cards

Even before the current war in the Middle East, the Budget has clearly been under somepressure. Recent comments from various government sources suggest that changes to the tax rules around investment properties could be under serious consideration. So, what sort of changes could we see on 12th May? And how might they affect you?

While there has been a lot of focus on the 50% CGT discount, there is also a push to restrict negative gearing – ie, the ability to offset rental losses against other income, such as salary and wages. Most other countries don’t permit this.

The 50% discount

Arguments have been advanced that the 50% discount is too generous, especially for assets that have not been held for a long time, and there are calls for reducing the discount to 331/3 % or even 25%.

Even before the current war in the Middle East, the Budget has clearly been under some pressure. Recent comments from various government sources suggest that changes to the tax rules around investment properties could be under serious consideration.

So, what sort of changes could we see on 12th May? And how might they affect you?

Another idea is to have a staggered discount, depending on how long the asset has been held.

There have also been calls to extend the existing 12 month holding period before a capital gain can qualify for the discount to, say, 18 months or 24 months.

Negative gearing

On the negative gearing issue, reform ideas range from quarantining losses altogether and offsetting them against future rental profits or against the CGT gain that arises when the property is sold to limiting negative gearing to two properties per taxpayer or to some dollar amount.

All assets or just residential property?

While many people view housing as special, the government may consider whether to apply any changes to assets more broadly, including commercial property, shares and the like.

Date of effect

If any changes made only apply to assets acquired by a taxpayer after the Budget date, then any significant revenue gains would be a long way off.

But Australians generally don’t like retrospective tax changes and the way these things have generally been handled is to make any adverse tax changes operate prospectively. After all, people have invested under the rules which existed at the time.

Applying any changes to the CGT discount or negative gearing to existing assets would be a courageous decision (in a “Yes Minister” sense), and one that the Opposition parties would relish.

WHAT SHOULD YOU DO NOW?

Anyone who owns an investment property or is considering buying or selling one should probably sit back and wait for the Budget to land. There may be nothing of any consequence in it after all, but if there is you’re welcome to come and speak to us about how you are affected and what your options are.

2026-05-07T04:42:43+10:00May 7th, 2026|
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Car logbooks: Back to basics

Three recent Administrative Review Tribunal (ART) decisions on claims for car expenses have shone a light on what the law requires in relation to car logbooks.

Where you use your car for business purposes, there are two ways of making a claim – the cents per kilometre method for up to 5,000 business kilometres, or the logbook method based on the business percentage of your actual expenditure.

The logbook method will generally result in a bigger deduction where your business use of the car is high and the actual car expenditure plus depreciation is significant. Bear in mind that travelling between home and work is not generally deductible.

To work out your business percentage, you can’t just make an estimate. You need to maintain a logbook for a representative period of 12 weeks. Unless your work or personal circumstances change, the resulting business percentage can then continue to be applied for five years.

For each car journey made for business purposes during the 12-week period the logbook has to record:

  • The day the journey began and the day it ended
  • The car’s odometer readings at the start and the end of the journey
  • The number of kilometres the car travelled on the journey
  • Why the journey was made

To calculate your deduction, you use the car’s odometer readings at the start and end of the 12-week test period to work out the total number of kilometres travelled during the period and apply the total business kilometres recorded in the logbook to arrive at the business percentage.

Importantly, and this is something that is sometimes overlooked, the law requires that the record in the car logbook is made “at the end of the journey or as soon as possible afterwards”. And this is where some taxpayers come to grief.

People are busy, and promise themselves they’ll do it later, but the longer they wait the more likely they are to make mistakes. It’s actually quite difficult to accurately recall various trips you think you must have made weeks ago, and the Tax Office can usually spot the difference between a genuine logbook that has been more or less contemporaneously completed and one that has been stitched together well after the event.

While recording all your car use every day for a twelve-week period may seem burdensome, once you’ve done it you’re generally good for another 248 weeks, which isn’t a bad trade-off. You also have some flexibility about which 12-week period you use.

The three taxpayers involved in the three ART decisions referred to above were seen by the Tax Office and the Tribunal as not having made contemporaneous logbook entries, having logbook odometer readings that were inconsistent with service records, having several versions of the logbook for the same test period and in one case being a complete fabrication.

In each of the three cases there were other reasons why their claims for car expenses failed, but the Tax Office will have noted the Tribunal decisions and must be more likely in future to critically examine logbooks supporting large car expense claims to ensure they comply with the law.

It’s never too late to fix these things, so if you have any doubts about the reliability of the logbook you are using to make your motor vehicle claim, come in and see us and we’ll see if we can sort things out. $

2026-04-07T13:36:47+10:00April 7th, 2026|
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CGT still applies even if you are “forced” to sell an asset

During the COVID pandemic years, we all suffered in one way or another – in particular the small businesses who relied on customers coming through their doors.

Mr Lewis was one such small businessman who operated a “multi-gym business” and who as result of the COVID pandemic found it impossible to keep his business operating and pay staff without additional financing. In his own words:

“…the government imposed lockdowns shut down my business operations virtually overnight. I had no income, no relief fast enough to respond, and no option but to sell personal assets just to meet my basic obligations — to pay rent, staff, escalating legal costs and debts.”

So that is exactly what he did.

He arranged for the family trust of which he was a beneficiary to sell shares and to distribute the gain to him. (Luckily, the trust had made some good investments.) As a result, a $200,000 capital gain was distributed to him which he used to keep his business going and to pay staff, etc.

The problem was he was clearly assessable on that capital gain – and he sought to challenge the decision by arguing he was forced to sell the shares and that he did not really make a gain because he had to use the money to save his business.

In short, Mr. Lewis argued the Tribunal should consider his intention and his hardship, claiming the gain was not a true “profit” since proceeds offset business losses from lockdowns.

However, the Tribunal had to conclude that he had realised the capital gain and that there was no discretion in the law to exclude it or exempt it.

Furthermore, there were no CGT concessions available – and, in particular, the 50% discount was not available as the shares were not held by the trust for more than 12 months.

The moral of this story is that where a capital gain has duly been realised or come home to the taxpayer there is no discretion for the amount to be excluded from the assessment process (unless the tax law specifically provides one: eg, a roll-over).

This is the case, despite the circumstances under which gain arose – including where the taxpayer was “forced” to sell an asset or the gain “accidentally” arose. The only exception is where there has been a compulsory acquisition of an asset under relevant legislation.

Otherwise, a taxpayer can only seek relief after the assessment process by making a hardship relief application – and even then it is very difficult to succeed, especially if there were any reasonable measures a person could have taken to avoid the hardship.

If you find yourself in such circumstances, come and speak to us about the matter – and preferably before you think you may be “forced” to sell some CGT assets.

2026-04-07T13:35:57+10:00April 7th, 2026|
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Higher super contribution caps from 1 July 2026: What it means for you

From 1 July 2026, the amount you can contribute to super will increase, creating new opportunities to boost your retirement savings.

The annual concessional contribution cap will rise from $30,000 to $32,500. These are contributions made from pre-tax money, such as employer contributions, salary sacrifice and personal deductible contributions.

Non-concessional contributions

The annual non-concessional contribution (NCC) cap will also increase from $120,000 to $130,000. These are contributions made from your after-tax money.

For people who are eligible to use the bring-forward rule, the higher caps will allow even larger contributions. From 1 July 2026, the three-year bring-forward cap will increase from $360,000 to $390,000.

Whether you can use these higher NCC caps will depend on your total super balance (TSB) at 30 June 2026. Your TSB is the total amount you have across all of your super accounts at that date, including money in accumulation and pension phase.

The table below highlights how the TSB thresholds and NCC caps will change from 2025–26 to 2026–27.

One important trap to watch is that if you have already triggered a bring-forward period before 1 July 2026, you do not get access to the new higher caps for that existing period. For example, if you triggered a three-year bring-forward in 2025–26, you remain limited to the current maximum of $360,000 across that three-year period, being until 1 July 2028. You do not get to use the new $390,000 cap.

Concessional contributions

The higher concessional cap may also create extra opportunities through catch-up concessional contributions. If your TSB is less than $500,000 at 30 June of the previous year, you may be able to use unused concessional cap amounts from the previous five years. In some cases, this could allow a very large deductible contribution to be made.

This means the lead-up to 30 June 2026 could be an important planning window. In some cases, it may make sense to delay a contribution until the new financial year to access the higher caps. In others, if you have already met a condition of release, taking a small amount out of super before 30 June may help keep your balance below a key threshold and preserve access to valuable contribution strategies.

The key message is that the higher caps could create valuable opportunities, but the rules around timing and TSB are also important. Now is a good time to check how these changes may apply to you. $

THRESHOLDS AND CAPS IN 2025-26 THRESHOLDS AND CAPS IN 2026-27
TSB at 30 June 2025 NCC cap TSB at 30 June 2026 NCC cap
Less than $1.76 million $360,000 (3 years) Less than $1.84 million $390,000 (3 years)
At least $1.76 million but less than $1.88 million $240,000 (2 years) At least $1.84 million but less than $1.97 million $260,000 (2 years)
At least $1.88 million but less than $2 million $120,000 (1 year) At least $1.97 million but less than $2.1 million $130,000 (1 year)
$2 million or more Nil $2.1 million or more Nil
2026-04-07T13:33:48+10:00April 7th, 2026|
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Granny flats: Beware of the CGT consequences

Granny flats are becoming more of a common feature of the urban environment. No doubt this is due to the ongoing and unremitting nature of the housing affordability crisis, and the relaxing of regulations about where and how they can be built. And they do seem to offer a very viable solution to the problem – at least in the short term.

However, if you are thinking of constructing one, or already have one in place, you need to be aware of all the tax implications – and they can be very significant.

Firstly, if you rent it at commercial or arm’s length rates, then not only will you be assessable on the rent (albeit being able to claim a portion of the deductions), but you will lose a part of the capital gains tax (CGT) exemption on your home. This is because you are using your home to produce income.

But in most cases, this partial CGT liability should be taxed concessionally by giving you a market value cost (at the time you first rent it) from which to calculate the gain (or loss).

Furthermore, the CGT 50% discount (or whatever is in place after the May Budget) should, in most cases, be available to reduce the amount of your assessable income.

However, where you do not rent your granny flat at commercial rates (including where the occupants may only pay their share of outgoings, such as electricity and rates) then you will not lose any CGT exemption on the home.

This will typically be the case where your granny flat is occupied by a relative, such as an adult child – or by a granny (and/or granddad), themselves!

It should also be noted that it is becoming common for the owner of the home (young adult children) to come to some sort of agreement with a parent or parents, whereby the parent/s agree to pay the price for building the granny flat in exchange for the “right to occupy” for a number of years. Likewise, such agreements may bring to an end a right to occupy.

The making of an agreement whereby “granny-flat” rights are created in another party (or bought to an end) can technically have immediate CGT consequences – despite the fact that it is made in relation to the CGT-exempt home and among family members.

However, the CGT rules provide that this will not be the case where the person acquiring the granny flat right has reached pensionable age (or has a relevant disability) and the arrangement is in writing and is not of a “commercial” nature.

These and other granny flat arrangements require good professional advice – particularly in terms of determining if such an agreement is “commercial”.

So, if you currently own a granny flat or you are thinking of constructing one for any purpose, it is important to come and speak to us – especially in terms of preserving the CGT exemption on your home (or at least maximising it).

2026-04-07T13:10:13+10:00April 7th, 2026|
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Div 296 tax is now law: What it means for your super

There’s been a lot of talk about changes to super, and one of the biggest updates is now official.

The government has passed the Division 296 tax, which will start from 1 July 2026. While it mainly affects people with large super balances, it’s still important to understand what’s changing and why.

A quick recap

When this tax was first proposed back in 2023, it caused quite a stir.

The original plan included:

  • » Taxing unrealised gains (basically, increases in value on paper that you haven’t actually received yet)
  • » A $3 million threshold that wasn’t going to increase over time

Understandably, many people were concerned this wasn’t fair.

After strong feedback, the government has revised the rules. The final legislated version aligns more closely with how tax usually works, that being, taxation of actual income not paper gains.

What’s changed in the final version?

Here’s what the new rules look like now:

  • » You’ll only pay tax on actual earnings, not paper gains
  • » Your super fund calculates your earnings and reports them to the ATO
  • » The $3 million threshold will increase over time with inflation
  • » A new $10 million threshold has been added
  • » The rules start from 1 July 2026, giving people limited time to prepare
  • » Defined benefit pensions are included, so all types of super funds are treated the same

How does the tax work?

Think of it like a tiered system:

  • » Up to $3 million – earnings are taxed as normal (up to 15%)
  • » $3 million to $10 million – a portion of earnings are taxed up to 30%
  • » Above $10 million – a portion of earnings are earnings taxed up to 40%

Importantly, if your balance is only slightly above $3 million, only a small share of your earnings will be subject to the higher tax rate.

Put simply, the more you have in super above these thresholds, the higher the tax applied to that portion of your earnings.

Who does it apply to?

This tax only applies to individuals with more than $3 million in super or pension phase.

A few key things to know:

  • » The threshold applies per person, not per fund
  • » That means a couple could have up to $6 million combined and not be affected
  • » Even if an SMSF has more than $3 million, you won’t be impacted unless your personal share exceeds the $3 million threshold

The first time this will apply is based on your balance at 30 June 2027.

How do you pay it?

You don’t need to calculate the tax yourself.

Here’s how it works:

  1. Your super fund reports your balance and earnings to the ATO
  2. The ATO works out if you owe extra tax
  3. You’ll receive a notice if you’re affected

If you do have a tax bill, you can choose to:

  • » Pay it from your own money, or
  • » Have it released from your super fund

What does this mean for you?

For most people, this change won’t apply at all.

But if you have a high super balance, it could mean:

  • » Paying more tax on part of your super earnings
  • » Rethinking how your super is structured over time

The new rules start from 1 July 2026, with the first tax assessments expected in 2027–28.

Don’t rush into decisions

If you think this might affect you, it’s important not to act too quickly.

Taking money out of super might seem like a solution, but:

  • » It can be difficult to put it back in due to contribution limits
  • » You could lose long-term tax advantages

Getting the right advice before making any changes is key.

Final word

While Division 296 tax is a big change, it’s targeted at people with large super balances and has been refined to be fairer than originally proposed.

If you’re unsure how it affects you, we’re here to help you understand the new rules and what they could mean for your situation.

2026-04-07T13:06:26+10:00April 7th, 2026|
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FBT Checklist 2025–26

With the due date for FBT returns coming up, the following non-exhaustive checklist may prove useful in determining whether you as an employer have an FBT liability.

Although it will generally fall to your accountant to prepare the FBT return from your software file or other records, all of the instances where you have provided employees and/or their associates (eg, spouse) with a potential fringe benefit may not always be apparent to them. To assist you in bringing these potential benefits to the attention of your accountant, following is a general checklist to refer to.

FBT Checklist 2025-26

With the due date for FBT returns coming up, the following non-exhaustive checklist may prove useful in determining whether you as an employer have an FBT liability.

Although it will generally fall to your accountant to prepare the FBT return from your software file or other records, all of the instances where you have provided employees and/or their associates (eg, spouse) with a potential fringe benefit may not always be apparent to them. To assist you in bringing these potential benefits to the attention of your accountant, following is a general checklist to refer to.

CAR FRINGE BENEFITS

Checklist item Y N
Does a car fringe benefit arise?
For FBT purposes a “car” is:
‧ any motor-powered road vehicle (including a four-wheel drive) that is designed to carry:
‧ less than one tonne, and
‧ fewer than nine passengers.		 □ □
Were any vehicles provided to employees (or associates) during the FBT year?
You make a car available for private use by an employee on any day that either:
(a) the car is actually used for private purposes by the employee, or
(b) the car is available for the private use of the employee.

A car is treated as being available for private use by an employee on any day that either:
(a) the car is not at the employer’s premises, and the employee is allowed to use it for private purposes, or
(b) the car is garaged at the employee’s home.

 □ □
If so, was the vehicle designed to carry less than one tonne and fewer than nine passengers?
If so, the vehicle would be classified as a “car” for FBT purposes. If not, the provision of the vehicle may constitute a “residual fringe benefit” (see later). Different requirements in valuing the benefit then apply.		 □ □
Exemptions
Is the vehicle a taxi, panel van or utility?
If so, an exemption is available where there is private use of the vehicle by a current employee and the vehicle is either:
‧ a taxi, panel van or a utility designed to carry less than one tonne, or
‧ any other road vehicle designed to carry less than one tonne which is not designed to principally carry passengers, and
‧ the employee’s use of such a vehicle is limited to:
‧ travel between home and work
‧ travel incidentals where travel expenses are incurred in the course of performing employment-related duties, and
‧ non-work-related use that is minor, infrequent and irregular. This means (according to the ATO) less than 1,000 kms of private vehicle use for the FBT year, with no single private use journey in excess of 200 kms. (The ATO expects the employer to exercise some oversight over the minor, infrequent and irregular use of the vehicle.)		 □ □
Is the vehicle a dual cab vehicle?
If so, the vehicle will qualify for the work-related use exemption only if:
‧ it is designed to carry a load of one tonne or more, or more than eight passengers, or
‧ while having a designed load capacity of less than one tonne, it is not designed for the principal purpose of carrying passengers.		 □ □
Is the vehicle a “modified” vehicle?
Certain modified vehicles are exempt from FBT where modifications permanently change a car and cannot be readily reversed for the car to be regularly used alternately as a passenger or non-passenger car. An example of such a vehicle is a hearse.		 □ □
Is the vehicle an unregistered vehicle?
If a car is unregistered for the full FBT year and used principally for business purposes (such as off-road or cars used on farms), any private use is exempt from FBT. A car that may be lawfully driven on a public road is regarded as being registered.		 □ □
Does the vehicle qualify for the electric cars exemption?
Zero or low emission vehicles (including some plug-in hybrids) are exempt from FBT where they are first held from 1 July 2022 and made available to current employees or associates. This incentive will apply until at least 2027, when there is to be a review. The GST-inclusive cost of the EV cannot exceed $91,387, which is the Luxury Car Tax threshold for fuel efficient vehicles for 2025-26. Plug-in hybrids have lost their exemption after 31 March 2025 unless there is a binding commitment to continue to provide the vehicle after that date.		 □ □

CAR PARKING FRINGE BENEFITS

Checklist item Y N
Does a car parking fringe benefit arise?
A car parking fringe benefit arises in relation to a particular day where all of the following conditions are present on that day:
‧ the car is parked on business premises or associated premises of the provider
‧ a commercial parking station is located within a 1km radius of the premises at which the car is parked
‧ the lowest fee charged by the operator of any such commercial parking station located within a 1km radius for all-day parking on the first “business day” of the FBT year is more than the “car parking threshold” ($11.03 for the 2025-26 FBT year).
‧ the car is parked on the premises for more than four hours (cumulative) between 7.00am and 7.00pm on that day
‧ the car is used for travel between home and work at least once on that day
‧ the provision of the parking facility is in respect of the employment of the employee
‧ the car is owned by, leased to, or otherwise under the control of the employee, and
‧ the employee has a primary place of employment on that day and the parking is at or in the vicinity of that primary place of employment.

Small businesses (gross turnover less than $10 million or aggregated turnover less than $50 million) are exempt from car parking FBT unless employees are using a commercial car parking station.

 □ □

LOAN FRINGE BENEFITS

Checklist item Y N
Does a loan fringe benefit arise…
‧ Has a loan been made by an employer (or associate) to an employee (or their associate)?		 □ □
‧ Was the loan provided in respect of the employment of the employee? □ □
‧ Do you know the date the loan was made? □ □
‧ Do you know the amount of the loan? □ □
‧ Do you know the purpose of the loan? □ □
‧ Has interest been charged on the loan that is at a rate lower than the benchmark interest rate of 8.62% (2025-26)?

The loan is not a fringe benefit where it is either:
‧ compliant with s109N ITAA 1936 for Division 7A purposes, or
‧ treated as a deemed dividend under s109D ITAA 1936 for Division 7A purposes.

 □ □
Exemptions
Is the minor benefits exemption under s58P FBT Act applicable?		 □ □
Did the loan constitute an advance of money by the employer to the employee to meet employment-related expenditure which will be incurred within six months?
If yes, an exemption is available.		 □ □

DEBT WAIVER FRINGE BENEFITS

Checklist item Y N
Has an employer (or their associate) released the employee (or their associate) from repaying an outstanding debt?
A debt waiver fringe benefit arises.		 □ □
Does the debt forgiveness give rise to a deemed dividend under Division 7A ITAA 1936?
If so, the debt waiver does not constitute a fringe benefit.

Section 109F ITAA 1936 may operate to treat a forgiven debt as a deemed dividend in the hands of a current or former shareholder (or associate) of a private company even if they are also an employee of the company (see s109ZB(2) ITAA 1936).

 □ □
Does the debt waiver constitute the forgiveness of a genuine bad debt?
If so, the debt waiver is exempt from FBT.		 □ □

EXPENSE PAYMENT FRINGE BENEFITS

Checklist item Y N
Does an expense payment fringe benefit arise? □ □
Did an employer (or their associate) pay or reimburse an employee (or their associate) for any expenses incurred by the employee (or their associate)? □ □
Was the payment or reimbursement for an item that was used solely for an income-generating purpose?
If yes, a fringe benefit does not arise.

Employee to complete Expense payment fringe benefit declaration.

 □ □
Was the expenditure reimbursement by the employer to the employee on a cents-per￾kilometer basis?
If yes, the payment is FBT-exempt. Note that the employee will be assessed on this reimbursement.		 □ □
Exemptions
Is the minor benefits exemption under s58P FBT Act applicable?		 □ □
Is an exemption available for a work-related item which is used primarily in the employee’s employment?
These work-related items include a portable electronic device (including mobile phones, laptops and tablet pcs), briefcase, tool of trade or an item of computer software, or protective clothing. Specific conditions apply to the provision of portable electronic devices.

Employers who are eligible small businesses (ie, aggregated annual turnover of less than $50 million) can provide multiple work-related portable electronic devices (such as laptops and tablets) in certain circumstances.

 □ □
Is an exemption available for the reimbursement of the following:
‧ membership fees and subscriptions to:
‧ a trade or professional journal
‧ use a corporate credit card, or
‧ an airport lounge membership
‧ newspapers and periodicals to employees for business purposes, and
‧ expenses relating to emergency assistance such as:
‧ first aid or other emergency health care
‧ emergency meals, food supplies, clothing, accommodation, transport or use of household goods
‧ temporary repairs, and
‧ any similar matter.		 □ □

BOARD FRINGE BENEFITS

Checklist item Y N
Does a board fringe benefit arise? □ □
Was a meal provided to an employee (or their associate) where the following conditions are satisfied:
‧ there is an entitlement under an industrial award or employment arrangement to be provided with residential accommodation and at least two meals per day
‧ the meal is supplied by either:
‧ where the employer is not a company – the employer, or
‧ where the employer is a company – the employer or a related company
‧ either of the following applies:
‧ the meal is cooked or prepared on the premises of the employer (or related company) and is provided to the recipient on employer’s premises (other than a public dining facility), or
‧ the following conditions are satisfied:
‧ the employee’s duties consist principally of duties to be performed in, or in connection with, an eligible dining facility of the employer or a facility for the provision of accommodation, recreation or travel which includes the dining facility
‧ the meal is cooked or prepared in the cooking facility of the dining facility, and
‧ the meal is provided to the recipient in the dining facility
‧ the facility in which the meal is cooked or prepared is not used wholly or principally for cooking or meal preparation for the employee or their associates, and
‧ the meal is not provided at a social function (eg, party or reception).		 □ □

LIVING-AWAY-FROM-HOME ALLOWANCE (LAFHA)

Checklist item Y N
Does a LAFHA benefit arise? □ □
Was an employee paid an allowance by an employer as compensation for additional expenses because the employee was required to live away from his or her usual place of residence located in Australia to perform employment duties during the FBT year?
If yes: The LAFHA rules may apply.		 □ □
Declarations and substantiation
Have the relevant LAFHA declarations been sought from employees in receipt of allowances or benefits before the lodgment day of the FBT return?
The ATO has released on its website pro-forma LAFHA declarations. The declarations include employees who fly-in, fly-out or drive-in or drive-out, employee-related expenses, and employees who maintain a home in Australia.		 □ □
Has documentary evidence been obtained from employee to substantiate accommodation and food expenses (if reasonable amounts determined by the ATO are not being used)? □ □
Alternatively, has a declaration for employee￾related expenses been obtained?
If a declaration is made, the record must be maintained for five years from its making.		 □ □
Relocation costs
Were any of the following expenses incurred in relation to the employee relocating from their usual place of residence to perform employment￾related duties:
‧ engagement of a relocation consultant
‧ removal and storage of household effects
‧ sale or acquisition of a dwelling
‧ connection or reconnection of certain utilities (eg, water, electricity), or
‧ transport of the employee (and family members) and any meals and accommodation en-route to the new location?

The provision of such benefits either as an expense payment, property or residual fringe benefit is typically exempt from FBT.

 □ □

MEAL ENTERTAINMENT FRINGE BENEFITS

Checklist item Y N
Does a meal entertainment fringe benefit arise? □ □
Has entertainment been provided to an employee (or their associate) by way of food or drink, accommodation or travel in connection with the provision of food or drink or recreation? □ □
Calculation of taxable value
Has an election been made to use either the 50/50 split method or the 12 week register method? □ □
If no election is made, the benefit is typically treated as either a property, expense payment or residual fringe benefit and the taxable value calculated based on the rules for those types of benefits (i.e. under the actual method).
‧ 50/50 split method – has all expenditure in respect of all persons been included?
‧ 12-week register method:
‧ Has all expenditure in respect of all persons been included?
‧ Does the register include details of the date, cost, location and persons in relation to the meal entertainment?

See TR 97/17 for guidance on the various circumstances where food and drink is provided and the applicable FBT and income tax treatment.

 □ □
Where the actual method is used:
‧ Has the food or drink been consumed by current employees on the employer’s business premises on a working day?
If so, apply the s41 FBT Act exemption relating to property benefits.
‧ Is the minor benefits exemption pursuant to s58P FBT Act applicable?		 □ □
Reduction in taxable value
Did the employee contribute towards the provision of the benefit?
If so, reduce the taxable value by the amount of the employee’s contribution.		 □ □

HOUSING FRINGE BENEFITS

Checklist item Y N
Does a housing fringe benefit arise? □ □
Has an employer (or their associate) provided an employee (or their associate) with a right to occupy a “unit of accommodation” as the usual place of residence of the employee (or their associate)?
A housing fringe benefit will arise except where an exemption applies.

An exemption will arise where the benefit constitutes remote area housing.

 □ □
Reduction in taxable value
Did the employee contribute towards the provision of the benefit?
Reduce the taxable value by the amount of the employee’s contribution.		 □ □

ENTERTAINMENT LEASING FACILITY EXPENSES

Checklist item Y N
Did an entertainment leasing facility expense fringe benefit arise? □ □
Has entertainment been provided to an employee (or their associate) by way of the employer incurring “entertainment leasing facility expenses”?
This includes the hire or leasing of a corporate box, boats or planes or “other premises or facilities” for providing entertainment.

Expenses, or parts of expenses, that are not entertainment facility leasing expenses for these purposes are:
‧ expenses attributable to providing food or beverages, and
‧ expenses attributable to advertising that would be an allowable income tax deduction.

 □ □

TAX-EXEMPT BODY ENTERTAINMENT FRINGE BENEFITS

Checklist item Y N
Does a tax-exempt body entertainment fringe benefit arise?
A charity must be endorsed in order to be income tax-exempt.		 □ □
Has entertainment been provided to an employee by a tax-exempt body (an organisation that is wholly or partially exempt from tax)?
Where this is the case, a separate category of fringe benefit arises (referred to as a “tax-exempt body entertainment fringe benefit”). It is only non-deductible entertainment that falls within this category of benefit (eg, a meal at a party). Refer to TR 97/17 for further guidance.

A tax-exempt body is an entity which is either:
‧ wholly exempt from income tax (eg, a club that earns income from members only), or
‧ partially exempt from income tax (eg, a club that earns income from both members and non-members).

 □ □
Calculation of taxable value
Equal to the expenditure incurred in the provision of the entertainment.
Reduction in taxable value
Did the employee contribute towards the provision of the benefit?
Reduce the taxable value by the amount of the employee’s contribution.		 □ □
Exemption
Is the minor benefits exemption under s58P FBT Act applicable?		 □ □

PROPERTY FRINGE BENEFITS

Checklist item Y N
Does a property fringe benefit arise? □ □
Was any property provided in respect of an employee’s employment?
Property includes both tangible and intangible property eg, goods, shares and real property.		 □ □
Exemption
Is the minor benefits exemption under s58P FBT Act applicable?		 □ □
Is an exemption available for a work-related item which is used primarily in the employee’s employment?
i.e. a portable electronic device (including mobile phones, laptops and tablet pcs), briefcase, tool of trade or an item of computer software, or protective clothing.		 □ □
Is an exemption available for the provision of:
‧ membership fees and subscriptions to:
‧ a trade or professional journal
‧ use of a corporate credit card, or
‧ an airport lounge membership
‧ newspapers and periodicals to employees for business purposes, or
‧ expenses relating to emergency assistance such as:
‧ first aid or other emergency health care
‧ emergency meals, food supplies, clothing, accommodation, transport or use of household goods
‧ temporary repairs, and
‧ any similar matter?		 □ □

RESIDUAL FRINGE BENEFITS

Checklist item Y N
Does a residual fringe benefit arise? □ □
Has a fringe benefit been provided by an employer to an employee which does not fall within any other specific fringe benefit category in the FBT Act? □ □
Exemption
Is the minor benefits exemption under s58P FBT Act applicable?		 □ □
Is an exemption available for a work-related item which is used primarily in the employee’s employment?
i.e. a portable electronic device (including mobile phones, laptops, tablet, PC), briefcase, tool of trade or an item of computer software, or protective clothing.

Employers who are eligible small businesses (ie, aggregated annual turnover of less than $50 million), can provide multiple work-related portable electronic devices.

 □ □

FBT REBATE

Checklist item Y N
Are you a rebatable employer?
Certain non-government, non-profit organisations are eligible for the FBT rebate. These include:
‧ certain religious, educational, charitable, scientific or public educational institutions
‧ trade unions and employer associations
‧ organisations established to encourage music, art, literature, science, a game, a sport or animal races
‧ organisations established for community service purposes
‧ organisations established to promote the development of aviation or tourism
‧ organisations established to promote the development of information and communications technology resources, and
‧ organisations established to promote the development of agricultural (etc), fishing, manufacturing or industrial resources.

Endorsement for FBT rebatable status is required from the ATO for charities.

Reduce FBT liability by a rebate equal to 47% of the gross liability subject to a capping threshold. The capping threshold is $30,000 per employee per FBT year.

The full capping threshold applies for the FBT year even if the employee was not employed by the organisation for the full year.

 □ □
2026-03-03T18:08:39+10:00March 3rd, 2026|
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