Salary Packaging Existing Car

pernunz on 06/01/2015 - 10:08
Last edited 06/01/2015 - 10:09

Being South Australian Government employees, my partner and I are able to access salary packaging through Maxxia.

She's been tossing up between getting a new car and using the salary packaging option, but has decided (in my view, poorly) that she wants to keep her existing car.

It is my understanding that through this system you can lease a privately bought car, so my question is as follows.

Could she sell the car to a third party for $1, then buy the car back from them for around market value, then recieve the tax benefits? The Maxxia website doesn't have many links to appropriate legislation, but are there rules about the car having not been registered in their name before?

Alternatively, could she sell me the car at an agreed value, then I salary package it?

Financial

Comments

  • RockyRaccoon on 06/01/2015 - 11:23

    Alternatively, could she sell me the car at an agreed value, then I salary package it?

    That would be the simplest. Also you save on transfer costs. Her to you vs her to 3rd party , then 3rd party back to her.

    Plus it maybe a bit suss with Tax department buying back a car that she owned, vs you buying from her which is less likely to be an issue

  • Shadowsfury on 06/01/2015 - 11:46
    +1

    Check with Maxxia if you can do a sale and leaseback through them - my packager can if you want to novate an existing car.

    • what on 06/01/2015 - 12:09

      oops, delete

  • what on 06/01/2015 - 12:13

    As suggested by shadowsfury, I would double check with Maxxia to see if you can package your existing car. When salary packaging was an option for me, I was able to do so.

    Did a quick google search 'salary package existing car' and found this on Salary Packaging Gurus website:

    The employee did not have to buy a replacement car, to obtain a salary package gain, despite being told this was the case by the employer’s novated lease outsourcer.

    For each one replacement car bought by an employee, there are around ten existing cars that could be associate leased.

    It would appear the main reason that this is not happening is that employers, employees, and taxation advisors are not aware that existing cars are eligible for salary packaging gains via Salary Packaging Gurus consultancy services.

  • pernunz on 06/01/2015 - 13:22

    I'll close this for now (if I can work out how) I should have just asked Maxxia directly. This is what one of their consultants told me:

    As long as the car is within 9 years old at the end of the lease term (which we offer 1-5 years) then there is an option called sale and lease back
    The way this works is we give you a tax-free cash injection for the market value of your vehicle and then package your car repayments along with all of your running expenses over a lease term of 1-5 years

  • fad on 06/01/2015 - 13:45

    I ended up doing this for one of my cars. Was 3 years old when I leased it back. You will pay GST when you lease it. Which means its 10% more than the private price.

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