By Peter Freeman Money
magazine, February edition
Tax tip: Concessions cut
The Gillard government has made cuts to a wide range of tax benefits, including living-away-from-home allowances, the private health insurance rebate, the baby bonus and fringe benefit tax concessions.
FBT has been a particular focus recently, with new restrictions on the concessional treatment of so-called in-house fringe benefits and looking at cutting the tax concessions provided to not-for-profit organisations.
In-house fringe benefits are employer-provided goods or services, such as food or education, that are identical or very similar to those provided to the employer’s customers. The taxable value of these benefits is 75% of the lowest sale price or value of the benefit. This value can be reduced by a further $1000 per employee per year.
But anyone receiving such benefits as part of a salary sacrifice arrangement put in place after October 21 last year no longer gets these breaks. As well, those who had a package in place on or before that date will lose these concessions from April next year.
Those who still have them need to take care not to accidently void their eligibility. This could happen if a salary package was formally altered or renewed.
The one positive is that the tax concessions for in-house benefits will remain in place when these aren’t provided as part of a salary sacrifice arrangement.
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