Recent changes to the Taxation Act 2017 mean that owners of closely held companies (five or less shareholders) now have the option to apportion expenditure on motor vehicles that are provided to shareholder employees between business and personal by using actual records, a percentage based on a logbook or in accordance with the IRD’s mileage rates. This avoids the need to pay FBT on these vehicles.
This election may only be made when the vehicle is first acquired or first used for business purposes from the start of the 2017/2018 tax year or later. This apportionment rule only applies to shareholder employee vehicles, therefore FBT will still apply to motor vehicles which are used by employees who are not shareholders.
This election may only be made when the vehicle is first acquired or first used for business purposes from the start of the 2017/2018 tax year or later. This apportionment rule only applies to shareholder employee vehicles, therefore FBT will still apply to motor vehicles which are used by employees who are not shareholders.
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