Salary sacrifice and leasing a car

My experience has been that the lease is for the full price of the new vehicle. The trade-in less payout is yours. It is taxable income unless the rules have changed in the last few years.

Quote:

Originally Posted by Chronic

yeah will do one last question can you trade cars with a lease ?

Do you mean trade a pvte car in on a financed on, or trade a financed car for another.

Either way you can, but the tax outcomes are obviously different. The new lease will be for the full amount of the new car as mentioned.

There's one tax trick that's often forgotten: There's as ruling or a case from about 10 years ago which I can't find now.

Anyway, if an employee pays out the residual, & subsequently sells the car at a profit, that's tax free.

Regards
Max P

More effort than simply trading in, but always worth looking at.

Quote:

Originally Posted by Tusker

You realy need to factor in the tax consequences, not just repayments.

Anyway, salary sacrifice invokes FBT, which at 48.5% is rarely viable unless you're in the top bracket, i.e. over $150,000 now.

Regards
Max P

true but if you make 'employee contributions'(pay part of the costs pre rather than post tax) you can nett this out so no nasty surprises at tax time.

Quote:

Originally Posted by Tote

Find out which Novated leasing company your wife's employer uses and their web site will have a calculator that allows you to calculate the impact on their take home pay.

An accountant is a good move though before commiting.
Regards,
Tote

Concur. Some companies are better than others but many employers don't offer a choice only nominating one company you can use.

Quote:

Originally Posted by waynep

Doesn't the full stop or caps key work on your keyboard ? ;):D

In my experience, Salary Sacrificing /Novated Leasing to buy a car is only really beneficial if a) you are on the highest tax rate and b) you do a lot of km a year. I had one but don't now.
You need someone to sit down with you and go through the sums for your circumstances.

- You should get all your maintenance and fuel GST free.

- But it is still a loan, so you are paying interest

For us, doing relatively low kms and not eqrning heaps, it works out to be fairly revenue-neutral (as compared with a loan). It is nice to have it all (car payments, rego, insurance, fuel, maintenance, tyres etc) all wrapped up in one neat package so we know what we are paying all-up. So from that point of vieww we like it. Plus we got a new car. That's always a good thing.

Enjoy !