I am told by my accountant that ip interest can be salary sacrificed though the latest budget has done away with this option, if so is it when is the new ruling effective
Removal of FBT exemption for expenses paid on jointly held assets
The Government has announced that the FBT law will be amended to remove the salary sacrifice opportunities in relation to jointly held assets such as investment properties.
Previously there was an anomaly with the "otherwise deductible" rule in the FBT law which allowed a spouse on a higher income to salary package 100% of the expenses on a jointly held asset (typically an investment property) and therefore effectively also claim the proportion of expenses related to the low income earning spouse.
The change will restore the long held principle that income and deductions from jointly held assets should be allocated according to their legal interest in the asset.
This measure will take effect from 7.30 pm (AEST) on 13 May 2008. Employees who have already entered into salary sacrifice arrangements will be able to rely on such arrangements until 31 March 2009.
Thank-you for the useful information much appreciated.
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