- Home |
- Testimonials |
- Partners |
- About Us |
- Contact Us|
- eNewsletter
Loading... Novated Lease
An employee leases a motor vehicle from the financier using a standard finance agreement. A Deed of Novation is then entered into between the employee, the employer and the financier under which the employees obligation to pay the lease rental under the finance lease is transferred to the employer for the term of the Deed of Novation. Therefore, the employer pays the lease rental to the financier. The amount of the lease payment will be deducted from the employees pre-tax salary as part of the employees salary package.
If the employee leaves the employers employment for whatever reason the Deed of Novation terminates immediately and the employer no longer has an obligation to pay the lease rental. The obligation to pay the lease rental under the finance lease reverts to the employee. The employee retains use of the vehicle as lessee until the finance lease expires.
Upon ceasing employment with the employer, an employee has the following options in relation to the motor vehicle:
Continued standard lease payments to the financier, or
The employee may be able to transfer the novated lease to a new employer.
Once the Deed of Novation has been entered into, the employer is the lessee of the motor vehicle and provides it to the employee as a salary package benefit.
The novated motor vehicle lease gives the employee the flexibility and choice normally enjoyed by a vehicle lessee under a standard lease. The vehicle is registered and insured in the employees name and the employee will pay the running costs associated with the vehicle from their salary package on a tax-exempt basis.
Payment of the residual value is the responsibility of the employee.
[Print out personal application form for fax]
[Contact Us]
Disclaimer: Multilease has made every effort to ensure that the material contained on this page is factually correct as at 26th March 2010. However, Multilease does not purport to provide taxation or legal advice and recommends that you consult your financial or taxation adviser for specific advice suited to your own circumstances. Multilease shall not be liable for loss or damage sustained by person acting in reliance of this material.
