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You may be able to save on income tax with this car leasing arrangement.
With an associate lease, instead of taking a loan from a finance provider to buy a car, you lease a car from an associate – typically a spouse, partner, relative or family trust.
Deductions from your salary are made by your employer to cover your car finance and running costs, such as fuel, insurance, rego and servicing, with some costs paid from your income before tax.
Check with your financial planner to see if an associated lease could work for you.
An associate must either own or lease the car and needs to have an ABN but not be registered for GST.
They must declare lease payments for your car as income, and the combined total of this income and any other non-salary income must not exceed $75,000.
The vehicle must qualify as a ‘car’ for FBT purposes, which means it must be either:
You get to enjoy the tax savings and convenience of a novated lease, without the hassle of buying a new car. We arrange to buy your current car at an agreed value* and you can spend the proceeds however you choose.
We then help you finance the car and all its running costs through a novated lease. Your payments are deducted from a combination of your pre- and post-tax salary. It means your taxable income could be reduced and you could pay less tax, keeping more of what you earn.
* Agreed value will be the market value at the time of purchase as depicted by Redbook on its website(https://www.redbook.com.au/)
This is general information only. Before entering into any salary packaging or novated leasing arrangement, you should consider your objectives, financial situation and needs, and seek appropriate legal, financial or other professional advice based upon your own particular circumstances. The availability of benefits is determined by your employer. Conditions and fees apply. Smartsalary Pty Ltd, ABN 24 096 796 100, a SmartTM company.