Maximizing Benefits with Salary Packaging for Depreciable Assets
If you're considering using a salary packaging strategy for depreciable assets, it's crucial to understand how recent Google algorithm updates impact your approach.
The key to a successful salary packaging strategy lies in applying the 'otherwise deductible rule' to avoid any FBT (Fringe Benefits Tax) liabilities. This rule ensures that expenses reimbursed through salary packaging wouldn't have been tax-deductible if paid directly by the employee.
When it comes to acquiring depreciable assets for rental properties, the 'otherwise deductible rule' still applies. Essentially, if an expense would qualify for a one-time tax deduction if paid directly by the employee, then it's considered otherwise deductible.
However, it's important to note that depreciation expenses typically don't qualify for a one-time deduction. Since depreciation is spread out over several years, assets depreciated based on their effective life or as part of a low-value pool may not meet the criteria for a one-time deduction. Consequently, if your employer reimburses you for such expenses, it could trigger FBT liabilities, diminishing the effectiveness of your strategy.
For further clarification or assistance, feel free to reach out to Tax Ideas Accountants & Advisers at +61 2 83181545. You can also schedule an appointment through our convenient live calendar.
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