FBT Exempt Airport lounge sal-sacrifice

[BruceW]

Forgive me for posting a non property related issue in here, but I know there are great minds at work in this forum.

I'm pretty sure I can salary sacrifice an airport lounge membership and as its an FBT exempt item this gives me a significant saving (top tax bracket) plus i would likely dodge the GST too.

My question is what would be the view of the ATO if I did the same for say a 5 year membership/life membership in this case?

My employer would prefer to handle this in a one of payment rather than to do this ongoing so would prefer me to cover multiple years in one renewal.

Thanks for any input the tax brains in here may be able to offer.

Regards,

Bruce

 

[Mry]

That would be a prepayment and would have to be considered under the prepayment rules that the employer is subject to.

But if the membership did allow for a five year renewal on the form (eg it said something like "Renew for a year OR renew for five years and save! save! save!), I would claim the deduction in full as it would be a purchase of a five year membership rather than the purchase of a one year membership and a prepayment on the next four.

 

[BruceW]

Mry

Thanks,

Yes the form has a range of options from 12 month to lifetime (which is equivalent to about 10 years payment) in each case you save more the longer you do it for.

Regards,

Bruce