Taxation Determination

TD 2005/8

Fringe benefits tax: What is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1 April 2005?

  • Please note that the PDF version is the authorised version of this ruling.
    This document has changed over time. View its history.

FOI status:

may be released


The number, subject heading, date of effect and paragraphs 1 and 2 of this document are a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and are legally binding on the Commissioner.

1. The benchmark interest rate for the fringe benefits tax (FBT) year commencing 1 April 2005 is 7.05 per cent per annum. There has been no change to the rate of 7.05 per cent that has applied for the previous FBT year.

2. The rate of 7.05 per cent is used to calculate the taxable value of:

a fringe benefit provided by way of a loan; and
a car fringe benefit where an employer chooses to value the benefit using the operating cost method.


3. On 1 April 2005 an employer lends an employee $50,000 for five years at an interest rate of 5% per annum. Interest is charged and paid 6 monthly and no principal is repaid until the end of the loan. The actual interest payable by the employee for the current year is $2,500 (50,000 ? 5%). The notional interest, with a 7.05 per cent benchmark rate, is $3,525. The taxable value is $1,025 ($3,525 - $2,500).

4. Note: FBT does not apply to a loan in relation to a shareholder in a private company, or an associate of such a shareholder, that causes (or will cause) the private company to be taken under Division 7A of Part III of the Income Tax Assessment Act 1936 to pay the shareholder or associate a dividend.

Date of effect

5. This Determination applies to the FBT year commencing on 1 April 2005.

Commissioner of Taxation
30 March 2005

Not previously issued as a draft


ATO references:
NO 2004/6082

ISSN: 1038-8982

Related Rulings/Determinations:

TD 94/29
TD 95/20
TD 96/17
TD 97/8
TD 98/6
TD 98/22
TD 1999/2
TD 2000/19
TD 2001/4
TD 2002/13
TD 2003/8
TD 2004/12

Legislative References:
ITAA 1936 Pt III Div 7A
FBTAA 1986 11(2)
FBTAA 1986 18
FBTAA 1986 19
FBTAA 1986 136(1)

TD 2005/8 history
  Date: Version: Change:
You are here 30 March 2005 Original ruling  
  18 May 2016 Withdrawn