FBT: Car Parking Benefits – a primary place of employment
The ATO has released an Addendum to TR 2021/2, its FBT ruling on car parking benefits. The updated ruling now specifies that an employee’s primary place of employment on a given day will be either:
- The business premises of an employer which are, or were, the “sole or primary place of employment of the employee”; or
- The business premises of an employer that are, or were, “otherwise the sole or primary place from which, or at which the employee performs duties of his or her employment”.
Determining the primary place of employment for car parking benefit purposes is significant because car parking benefits are only fringe benefits where a car is used by an employee to travel between home and their primary place of employment and is then parked at or in the vicinity of that primary place of employment.
Super Annuation:
Super account balances above $3m to be taxed 30% on earnings
The Government has announced that it will increase the tax rate for superannuation fund earnings from 15% to 30% for individuals with account balances above $3 million.
Currently, fund earnings from superannuation in the accumulation phase are taxed at up to 15%. This 15% tax rate will continue for account balances below $3 million but will be increased to 30% for balances above that amount (around 80,000 people). The Treasurer said the increased tax rate will not impose a limit on the size of superannuation account balances in the accumulation phase but will instead apply to future earnings from 1 July 2025. It is expected to generate an extra $2bn in revenue per year.
The Government said it will introduce legislation to implement the measure “as soon as practicable” after consultation with industry.
Date of effect: 1 July 2025.
Super tax changes: Treasury fact sheet
Treasury has released a fact sheet setting out further detail about its proposed superannuation tax changes for individuals with account balances above $3m. The fact sheet, Better Targeted Superannuation Concessions, sets out the proposed application and earnings calculation method, together with examples.
Under the proposed changes, individuals with total superannuation balances (TSBs) over $3m at the end of a financial year will be subject to an additional tax of 15% on earnings. Broadly, the additional tax will only apply to the proportion of earnings corresponding to balances above $3m. Earnings will be calculated with reference to the difference in TSB at the start and end of the financial year, adjusting for withdrawals and contributions. Negative earnings will be carried forward. Similar to the existing Division 293 tax regime, individuals will have the choice of either paying the additional 15% tax out-of-pocket or from their super funds.
SMSF Association CEO Peter Burgess said the good news is that super funds will not be required to calculate the earnings attributable to the member’s balance above $3m. Rather, the ATO will use a prescribed formula to calculate the proportion of total earnings which will be subject to the additional 15% tax. But on the debit side, the ATO will be using an individual’s total super balance to calculate their earnings, which means it will include all notional (unrealized) gains and losses. The SMSF Association’s preferred approach would be for the ATO to calculate “notional earnings” using a similar approach to the existing excess contributions tax regime.
Source: IPA Australia
