Posted on | April 3, 2012 | Comments Off
Not all people understand and comprehend all kinds of contracts or agreements including a novation agreement. Nowadays, most people get Novated Lease to create an agreement involving three parties: the lease company with an employer and an employee. There will be a contract of property during a specified period in return of a specified rent. It is meant to make the employee leases a particular vehicle from the lease company whereas employer approves or permits to take on the employee’s responsibility or the act of obligating under the lease. Therefore, there is a need to know more about a novation agreement.
Through years, a novation agreement has become popular. By utilizing Novated Lease Calculator, there will be thousands in tax that can be saved. As a vehicle financing, people prefer to get this kind of lease to get some benefits. Applying a novated car lease agreement, the employee can have the vehicle (as an example is a car) and get the right to take it. In addition, the employee will get tax advantages in his/her remuneration package. The flexibility of repayments under novated leases is very beneficial that deals with the interest rate, the term, and also the rest of the payment. There will be tax savings as all the cost of the ownership of the car given or packaged to the employee’s salary. Either way, there will also be a regular payment for any kinds of maintenance and repairs.
Both the employee and the employers get some advantages. No doubt that Novated lease is always sought by many companies. As it is very popular in Australia as a three-way agreement, the three parties will get many beneficial values. The employee will get income tax savings, have an access to kinds of discounts as if the employee has other vehicles, get a choice of the car without any force, and the vehicle can be handed over to a new employer while the vehicle still belongs to the employee. The employer also get some benefits such as giving an effective way to increase all employees’ salaries with a little cost to the business, getting an alternative for operating company vehicles’ fleet, having minimum risks for the vehicles, and having less responsibilities as the vehicle is passed to the employee.
In general, there can be some additional considerations when a novation agreement is needed to be made between three parties: the employee, the employer, and the lease company.