Section RD 56 — Income Tax Act 2007: Private use of motor vehicle: when schedular value not used

RD 56 Private use of motor vehicle: when schedular value not used When this section applies (1) This section applies when the employer has not valued the motor vehicle using schedule 5, clause 9 (Fringe benefit values for motor vehicles). Reduction (2) In the calculation of the taxable value of the fringe benefit, the value of the benefit determined under sections RD 28 to RD 30 is reduced by an amount that is the applicable percentage of the cost (determined including GST under schedule 5, clause 8(a) ) of the motor vehicle to the employee or the associated person as follows: (a) if FBT is paid quarterly, 2.5%: (b) if FBT is paid on an annual basis, 2.5% for each quarter in which the vehicle was part-owned by the employee or the associated person: (c) if FBT is paid on an income year basis, 10%. When period longer or shorter than income year (3) In subsection (2)(c) and section RD 57(2)(c) and (3) , if the period for which the employer accounts for FBT differs from a normal income year for the reasons described in subsection (4), the amount by which the taxable value of the fringe benefit is reduced is a percentage of the cost (determined including GST under schedule 5, clause 8(a) ) of the motor vehicle to the employer or the associated person equal to the amount calculated using the formula— 10% × number of days in period 365. Reasons for difference (4) The period for which the employer has accounted may be longer or shorter than the normal income year because the employer has either— (a) started or ceased business during that income year; or (b) chosen, with the agreement of the Commissioner, to provide a fringe benefit return for the income year ending with the date of the annual balance of their accounts. When vehicle owned less than whole year (5) If an employee has not been part-owner of the motor vehicle for the whole of the income year, or the period referred to in subsection (4), a reduction under this section is reduced by the proportion of the number of days of the income year or period for which the employee was not a part-owner to the total number of days of that income year or period. Defined in this Act: amount , associated person , business , Commissioner , employee , employer , FBT , fringe benefit , GST , income year , motor vehicle , pay , quarter , Compare: 2004 No 35 s ND 1U Section RD 56(1): amended, on 1 April 2008, by section 540(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section RD 56(2): amended, on 1 April 2008, by section 540(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section RD 56(3): amended, on 1 April 2008, by section 540(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).