What if the perks you’ve always treated as “just part of being an owner” suddenly became a tax problem? Right now, as FBT season approaches, that’s exactly where many family businesses are exposed — not because they’ve done anything wrong, but because the lines between “owner” and “employee” aren’t as clear as people think.

A recent high-profile case put this issue under a microscope. Three brothers ran a large family business through a discretionary trust. No formal salaries. No employment contracts. Just profits and benefits flowing through the trust — the way many family groups operate.

They had access to luxury vehicles — Bentleys, Ferraris — used for both business and personal purposes. The ATO stepped in and said: “These are fringe benefits. FBT applies.” At first, the outcome swung in the ATO’s favour. That sent a ripple of concern through family businesses everywhere. But then came the turning point.

The Full Federal Court stepped back and asked a deeper question:  What is the real substance of what’s happening here?

And the answer changed everything. The Court found:

• These individuals weren’t necessarily “employees” in the traditional sense
• The benefits weren’t clearly linked to employment
• The arrangements were grounded in their roles as business owners and beneficiaries

In other words — not every benefit equals FBT.  That’s the opportunity. But here’s the catch… it wasn’t luck that saved them. It was structure, evidence, and clarity.

 This case is a wake-up call — not because the rules changed, but because enforcement is getting sharper. If you’ve got:

• Vehicles
• Phones
• Travel
• Or “informal perks” flowing through your business or trust

You need to ask one simple question:  Is this documented and structured properly — or are we hoping it passes? Because hope is not a strategy when the ATO comes knocking.

The smart move? Review it now — while you’re in control. Get the structure right.  Get the documentation right.  And make sure what you’ve built is protected — not exposed.

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