FBT rate of interest on loans increased

The rate of interest used to calculate fringe benefit tax for low-interest employment- related loans has been increased in line with market rates. The new rate, which will apply from the quarter beginning 1 January 2001, will be 8.5%, up from the present rate of 8.1%.

The rate is reviewed regularly to ensure it is in line with the Reserve Bank survey of first mortgage housing rates. It was last changed effective from the quarter beginning 1 July 2000.

The rate was changed by Order in Council on 27 November 2000. Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations (No 3) 2000.