If you lose your job or change employers in the middle of a lease, you don`t need to enter into a new contract. Instead, the lease is transferred to your new job. It can also be created as a financial loan. It is important to understand how these and other financial consequences of a novated lease can affect you, so you are looking for help from an accountant or financial advisor. This confusion extends to the terms used by wage packing companies to describe different wage packaging agreements that involve an innovative lease. While it is your employer who is required to pay the FBT, they may choose to reduce their salary from the amount of FBT they pay based on your pay victim contract. The duration of the new lease can vary from one to five years, and unless your employer has decided otherwise, you can usually choose the car you want to rent, whether it`s new, used or even, in some cases, your existing car. If you decide to refinance your existing vehicle, the residual value will be re-leased at the end of the agreement. This benefits drivers by saving trouble when selling or trading. However, it is important to weigh the reliability of your vehicle before you make up your mind. The information on this page is only used for general information purposes and has been developed regardless of your goals, financial situation or needs. Before reacting to this information, you should consider the relevance of this information to your circumstances.
Applications are subject to the bank`s normal credit authorization and asset adequacy. Fees, fees and conditions are charged. Terms and conditions are provided with each agreement at the time of the credit authorization. Tax considerations are general and are based on current tax legislation and may be subject to amendments. You should obtain independent and professional tax advice before making a decision based on this information. The third type of leasing is described as novated finance lease or non-maintained novated lease, in which only the innovative lease is a salary, none of the other operating costs, such as fuel, insurance or maintenance, being paid by the employer.  This plan is of minor or no use to the worker because the value of the ancillary benefit does not change, as it is based on the original purchase price, but all tax benefits on other operating costs are lost, since it is not a salary. The effect of the payment of the FBT or the use of ECM offsets most or all of the potential tax benefits derived from the wage packaging of leases. A lease agreement is financed by a three-way contract (innovation contract) between the taker, the lessor (usually a financial company) and a third party, in which all parties agree that the third party will assume some or all of the obligations of the taker (as a rule, these are rents in place of the taker). While tax incentives and cost savings are significant, drivers often wonder what will happen at the end of the new lease. You still own the car, but certain rights and obligations are assigned to your employer.
As part of a novated lease, you don`t technically have the vehicle. This means that you are unable to make any changes and cannot claim the car as your own asset for other credit or financing purposes. This is the minimum residual value of a vehicle that takes into account the depreciation of a leased vehicle over the years. You`ll find the ATO Novated-Rest-Remaining guild lines in the table below, based on an effective lifespan of eight years.