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Loan Benefits
A loan fringe benefit arises where an employer makes a loan to an employee, including a director, for these purposes a “loan” includes:
1. Advance of money including salary advances
2. Provision of credit
3. Payment of an amount on behalf of another person where that
person has an obligation to repay.
The loan fringe benefit amount is the amount of interest that would be payable on the loan using the benchmark interest rate of the year.
The focus of this type of benefit is on directors or shareholders “debit” loan balances with their companies. A “debit” loan balance is where the director owes the company money. If your loan account has gone into debit at any time during the FBT year we will have to obtain details of the movements to calculate the statutory interest, which is at the rate of 5.85%.
A general ledger printout of the loan account gives us most of the information to enable us to do the calculations. We may already have prepared some accounts for you during the year and have details of these movements. Alternatively, these details may need to be compiled now.
If these loans are used for income producing purposes (e.g. an employee has borrowed money from the company to buy shares) there will be no taxable fringe benefit but we will still need to do the calculations for substantiation purposes. If interest is already being charged on the loan (e.g. a loan to an employee) then we will need the interest rate charged or the interest actually charged in order to calculate the taxable fringe benefit.
Note: A loan of property is not a loan benefit; this is defined as a “residual benefit”, which is discussed in a later section.
Debt Waiver Benefits
A taxable benefit arises where an employer releases an employee from a debt. The taxable value is the amount waived, so therefore we will require this information if applicable. Please provide the following for each debt waiver:
 name of employee
amount of debt waiver
date of debt waiver
If you require further information or assistance in preparing your FBT return feel free to contact us at fbt@krestondormers.com or on (02) 9874 8038 |
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