FBT Q&A ‘ Earliest holding time


We recently sold a number of our fleet cars to a leasing company at market value then leased them back from the leasing company. The cars did not leave our premises and are still registered under our business name. The subject cars are all aged less than 4 years old.

Do we retain the original base values of the vehicles for FBT calculation or can we calculate a new base value which could be determined by the sale price of the vehicle?


In determining the base value of a particular car held by a particular person, it must be the value as determined at the earliest holding time.

In this case, you owned the vehicles and have essentially sold and leased back the same vehicles. So originally the cars were held in an ownership capacity and now are held in a lessee capacity for FBT purposes.

At the earliest holding time the cars were owned by you and so the base value is your cost price at this point in time.

The sale and lease back arrangement has not altered the earliest holding time in respect of each of the particular cars and so the original base values should continue to be used.

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