13 May 08 Jointly held assetsThe Government will amend the fringe benefits tax (FBT) law to ensure that the full value of a benefit that has been provided to both an employee and an associate in relation to a jointly held asset will be subject to FBT. This tax integrity measure will have effect for new arrangements from 7.30 pm (AEST) on 13 May 2008.
This will overcome the Federal Court’s decision in National Australia Bank Ltd v FCT 93 ATC 4919 that resulted in an anomaly in the FBT law which also gave rise to salary sacrifice opportunities in relation to jointly held investment properties.
The measure will re establish the principle that income and deductions arising from jointly held assets should be allocated between joint owners according to their legal interests. Employees who have already entered into salary sacrifice agreements with their employer will be able to utilise existing arrangements until 31 March 2009 (that is, the end of the current FBT year). This will provide time for employers and employees to renegotiate salary packages to avoid incurring a FBT liability.
For a copy of the Treasurer's press release, No 2008/48, 13 May 2008, go here