28/05/2026
"Simplified fringe benefit tax (FBT) on motor vehicles
The Government proposes to simplify the application of FBT to motor vehicles. Currently, FBT is calculated based on the number of days that the motor vehicle is available for private use
by the employee. The Government proposes to remove the requirement to count days, with the proposal being that FBT is calculated based on the specific category that the motor vehicle
falls into. It is proposed that an employer would select the applicable category at the time of 2026 Budget Report 8
providing the motor vehicle to the employee and would only need to be changed if there was a material change in the employee’s private use of that motor vehicle. The work-related vehicle
exemption is set to be removed. The proposed changes are designed to significantly reduce compliance costs for employers by simplifying the calculation of FBT.
The Government has proposed that the FBT changes would apply for fringe benefits provided after 1 April 2027.
Outstanding loans from companies to shareholders on removal of
company from Companies Register
Where a company is removed from the Companies Register and an outstanding loan remains from the company to its shareholder, the Government proposes that the shareholder will derive taxable income from this outstanding loan under the financial arrangements (FA) rules. The shareholder will be treated as deriving that taxable income six months after the company
was removed from the Companies Register.
This change is proposed to apply for any company removed from the Companies Register on or after 4 December 2025. The retrospective nature of this proposed change is an integrity
measure, and aligns when the paper initially consulting on these changes was published last year."
