The logbooks were written after the ATO asked for them. The Wisconsin expert said the car was born to race. Neither helped.
A Perth accountant bought a $346,000 Ferrari through his firm. He said it was for driving to work and visiting clients.
The ATO said otherwise. The Administrative Review Tribunal agreed. MXSN and Commissioner of Taxation [2026] ARTA 186.
The facts
In 2013, a Perth accounting firm purchased a second-hand Ferrari for $346,140. The sole director, ‘Mr Jones’, claimed the car was used to commute, visit clients and travel between the firm’s offices in Perth.
In March 2021, the ATO commenced an audit and assessed FBT liabilities on the car benefit, being the private use, or availability for private use, of the Ferrari.
Jones initially told the Tribunal he had never carried passengers. He later admitted he took his girlfriend on annual trips to Margaret River, including lunches at wineries.
What the Tribunal found
The logbooks were fabricated. The Tribunal found they were constructed in April and June 2021, shortly after the ATO requested them. It called them “complete fabrications” and gave them no weight.
Private use was not minor, infrequent or irregular. The Margaret River trips were personal, and the threshold in s 8(2)(b)(ii) of the FBT Act was not met.
The “not a passenger vehicle” argument failed. An expert witness from Wisconsin argued the Ferrari was “born to race.” The Tribunal rejected this, citing the manufacturer’s own marketing materials describing the car as designed for “comfort mode for everyday driving.”
The amended FBT assessments were upheld. The cost base was adjusted to $325,212.65, but the FBT liability stood.
What this means for your clients
The “minor, infrequent and irregular” exemption is narrow. Even occasional personal trips can disqualify a vehicle. If the car is available for private use, the ATO will treat it as a benefit.
Logbooks must be contemporaneous. Constructing records after an audit commences is destructive to credibility. The Tribunal did not hold back here.
Creative arguments about vehicle design will not save you. If the manufacturer markets it for everyday driving, the Tribunal will take that at face value.
High-value vehicles attract high-value scrutiny. A $346,000 car on the books of an accounting firm is exactly the kind of item the ATO will audit. Review vehicle arrangements and document the FBT position properly, not after the ATO comes knocking.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.