FBT Q&A ‘ Whether an insurance excess is included in a car expense calculation under s. 10

Question:

In relation to Car Fringe Benefits where the taxable value is calculated under Section 10 of the Fringe Benefits Tax Assessment Act 1986 – Operating Cost Method, are insurance excesses payable by the insured to the insurer or smash repairer included in the car expenses calculation?

Answer:

In general terms, for FBT purposes the operating cost of a car consists of car expenses, registration and insurance costs.

It is difficult to see how the insurance excess would not be considered an insurance cost to do with the car. As such, it appears that the insurance excess can be included as an operating cost for the purposes of determining the FBT liability.

This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.