“My spouse is receiving a $200,000 incentive. As I have no income this financial year, is he able to request his employer to pay/gift it to me?"
- Question from Joe in Melbourne, VIC
Top answer provided by:
Mark Smith
Hi Joe,
What a great question!
While we all love to be able to reduce the tax on our income, the ATO does have specific rules in place to prevent tax avoidance. So unfortunately, the answer to your question is no. This is due to the rules surrounding a specific section of tax law known as Fringe Benefits Tax (FBT).
What is a fringe benefit?
Any benefit that a business provides to staff, their relatives, or associates (outside of normal salary/wages) can be classed as a “fringe benefit”. FBT rules provide that infrequent gifts of $300 or less are exempt from tax. However, the benefit must not be or form part of a reward for service. Cash bonuses are a reward for service and subsequently cannot be paid as a fringe benefit.
Even if the employer were allowed to pay the bonus as a gift, it would be taxed under FBT rules at 47%. Subsequently, you would not be in a better position than if your spouse received the funds as part of their income.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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