Fringe Benefits Tax
Are the fringe benefits provided to an employee, being the private use of a car held by the employer during the year of tax, excluded fringe benefits as prescribed by regulation 8 of the Fringe Benefits Tax Regulations 1992 (FBTR), when a second employee's private use of the same car is an exempt benefit?
Yes. Regulation 8 of the FBTR is satisfied and the fringe benefits provided to the first employee are excluded fringe benefits in relation to the year of tax.
The employer owns and maintains a car which is designed to carry a load of less than one tonne.
The employer provides the first employee with the use of the car during the year of tax. The first employee uses the car for travel to and from work and for other private purposes.
The benefits that arise through the first employee's use of the car are benefits provided in respect of the employee's employment and are fringe benefits within the meaning of subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).
The employer also provides a second employee with the use of the same car during the year of tax. The second employee uses the car for private purposes to travel from work to a home emergency and then returns to work.
The benefits that arise through the second employee's use of the car are benefits provided in respect of the employee's employment and are exempt benefits (minor benefits) under section 58P of the FBTAA. These benefits would be fringe benefits except that the benefits are exempt benefits.
The year of tax is the year starting on 1 April 2007.
Section 5E of the FBTAA determines the employee's individual fringe benefits amount. Excluded from the individual fringe benefits amount are excluded fringe benefits. Benefits which are prescribed for the purposes of paragraph 5E(3)(i) of the FBTAA are excluded fringe benefits.
Regulation 8 of the FBTR prescribes benefits relating to pooled or shared cars as being excluded fringe benefits for the purposes of paragraph 5E(3)(i) of the FBTAA.
Fringe benefits which are excluded fringe benefits would also not be included in the employee's reportable fringe benefits amount under Part XIB of the FBTAA.
In general terms, the exclusion prescribed by regulation 8 of the FBTR for pooled or shared cars is available from 1 April 2007 where a car held by an employer is used by two employees during the year of tax, where each employee is provided with: • a fringe benefit which is a car benefit, or, • an exempt benefit which is a car benefit which would have been a fringe benefit if it were not an exempt benefit.
Where such a pooled or shared use exists during the year of tax the benefits are excluded fringe benefits for both employees.
Regulation 8 of the FBTR provides: 8(1) For paragraph 5E(3)(i) of the Act, a car benefit is prescribed if: (a) the benefit: (i) is a car fringe benefit; or (ii) would be a car fringe benefit if it were not an exempt benefit; and (b) the car to which the benefit relates is applied to or available for the private use of more than one employee under subsection 7(1) of the Act. Example: An employer makes one car available to 3 employees, for private use, at different times during the year of tax. 8(2) The benefit is prescribed in relation to: (a) each employee in relation to which the benefit is provided; and (b) each year of tax from 1 April 2007.
Subregulation 8(1)(a)(i) of the FBTR requires the benefit to be a 'car benefit' as described in subsection 7(1) of the FBTAA. The term 'car benefit' is defined in subsection 136(1) of the FBTAA and means a benefit referred to in subsection 7(1) of the FBTAA.
Under subsection 7(1) of the FBTAA, a car benefit will arise at any time on a day in respect of the employment of an employee where a car is held by the employer and is applied to a private use by the employee or is taken to be available for the private use of the employee.
Subsection 136(1) of the FBTAA and subsection 995-1(1) of the Income Tax Assessment Act 1997 provides: car means a *motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers.
During the year of tax, the car is held by the employer and is applied to a private use by the first and second employees.
The benefits provided to both employees are benefits which are car benefits under subsection 7(1) of the FBTAA.
The benefits provided to the first employee are fringe benefits within the meaning of subsection 136(1) of the FBTAA. These benefits satisfy subregulation 8(1)(a)(i) of the FBTR.
The benefits provided to the second employee are benefits which are exempt benefits under section 58P of the FBTAA and would be fringe benefits within the meaning of subsection 136(1) of the FBTAA except that the benefits are exempt benefits. These benefits satisfy subregulation 8(a)(ii) of the FBTR.
The car benefits provided to the first employee relates to a car, the provision of which gives rise to the benefit described in subregulation 8(1)(a) of the FBTR for more than one employee. Subregulation 8(1)(b) of the FBTR is satisfied and the fringe benefits are excluded fringe benefits under subregulation 8(2)of the FBTR.
The year of tax is a year commencing after 31 March 2007. Subregulation 8(2)(b) of the FBTR is satisfied.
Regulation 8 of the FBTR is satisfied and the fringe benefits provided to the first employee, being the private use of the car by the employee, are excluded fringe benefits in relation to the year of tax.
Amendment History
Date of amendment Part Comment 20 March 2026 Business Line Updated to correct business line 17 July 2015 Issue Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992. 17 July 2015 Decision Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992 17 July 2015 Reasons for Decision Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992. 17 July 2015 Legislative References Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992.
Date of amendment | Part | Comment
20 March 2026 | Business Line | Updated to correct business line
17 July 2015 | Issue | Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992.
17 July 2015 | Decision | Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992
17 July 2015 | Reasons for Decision | Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992.
17 July 2015 | Legislative References | Substitute reference to Regulation 3F of the Fringe Benefits Tax Regulations 1992 with reference to Regulation 8 of the Fringe Benefits Tax Regulations 1992.