FBT & personal use assets are on ATO audit radar

The Fringe Benefits rules are a complicated layer to the taxation system.

FBT operates in addition to GST and Income tax.

The ATO has flagged that they will be looking closely at “personal use assets” owned by Companies or Trusts.

Some examples of personal use assets are Boats, Caravans, Motorbikes, Vehicles (including cars and trucks).

So how does the ATO know about personal use assets owned by your Company or Trust?

Insurance companies and department of transport automatically share information with the ATO.

Most audits are triggered by automatic “data matching”.

The ATO system already knows your Company owns a boat and caravan. When you lodge an income tax return or FBT return and a label on these returns is not completed as expected, an audit or review is triggered.

So how do we avoid audits and ensure we don’t get hit with additional taxes?

Document, document, document!

Everyone needs a logbook for any vehicle owned in a Trust or Company that is “primarily for carrying passengers”. A good rule of thumb is if you can fit a childs car seat into the vehicle it is likely to be subject to FBT.

It is perfectly acceptable to purchase personal use assets in a Trust or Company.

This becomes tricky when we do not have a clearly documented reason behind the purchase, like asset protection. It is best practice, where assets are purchased for asset protection purposes, to document details of usage and access to the asset.

The FBT year runs 01 April to 31 March.

FBT is complicated and can be difficult to navigate.

So that we can assist you with minimising any potential FBT please have your logbooks, registration paperwork and copies of insurance policies to us by 30th April.

Alicia Delves 07.03.2025