New FBT rates for the 2018/19 FBT year

The ATO has released Taxation Determinations setting out the following rates for the FBT year commencing on 1 April 2018.

FBT:  Benchmark interest rate

The benchmark interest rate for the 2018/19 FBT year is 5.20% p.a., which is used to calculate the taxable value of:

• a loan fringe benefit; and
• a car fringe benefit where an employer chooses to value the benefit using the operating cost method.

Example

On 1 April 2018, an employer lends an employee $50,000 for five years at an interest rate of 5% p.a., with interest being charged and paid 6 monthly, and no principal repaid until the end of the loan.

The actual interest payable by the employee for the current year is $2,500 ($50,000 × 5%).  The notional interest, with a 5.20% benchmark rate, is $2,600.

Therefore, the taxable value of the loan fringe benefit is $100 (i.e., $2,600 – $2,500).

FBT: Cents per kilometre basis

The rates to be applied where the cents per kilometre basis is used for the 2018/19 FBT year in respect of the private use of a vehicle (other than a car) are:

FBT: Record keeping exemption threshold

The small business record keeping exemption threshold for the 2018/19 FBT year is $8,552.

The ATO has also released Taxation Determinations setting out the indexation factors to value non-remote housing, and the amounts the ATO considers reasonable for food and drink expenses incurred by employees receiving a living-away-from-home allowance (LAFHA) fringe benefit, for the FBT year commencing on 1 April 2018.