PART III
-
FRINGE BENEFITS
Division 11
-
Property fringe benefits
[
CCH Note: Modification Declaration FRLI No F2021L00261
(
Bankruptcy Regulations 2021
: FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Division 11 of Part III of the Act is modified by repealing the Division.]
Subdivision B
-
Taxable value of property fringe benefits
SECTION 44
REDUCTION OF TAXABLE VALUE
-
OTHERWISE DEDUCTIBLE RULE
44(1)
Where:
(a)
the recipient of a property fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and
(b)
if the recipient had, at the provision time, incurred and paid unreimbursed expenditure (in this subsection called the
gross expenditure
), in respect of the purchase of the recipients property, equal to the amount that, but for this subsection and Division
14
and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax
-
a once-only deduction (in this subsection called the
gross deduction
) would, or would if not for Divisions
28
and
900
of the
Income Tax Assessment Act 1997
, have been allowable to the recipient under that Act or the
Income Tax Assessment Act 1936
in respect of the gross expenditure; and
(ba)
the amount (in this subsection called the
notional deduction
) calculated in accordance with the formula:
where:
GD
is the gross deduction; and
RD
is:
(i) if there is no recipients contribution in relation to the property fringe benefit
-
nil; or
(ii) if there is a recipients contribution in relation to the property fringe benefit equal to, or calculated by reference to, an amount of consideration paid by the recipient to the provider or to the employer in respect of the provision of the recipients property
-
the amount (if any) that would, or that would but for Divisions
28
and
900
of the
Income Tax Assessment Act 1997
, have been allowable as a once-only deduction to the recipient under that Act or the
Income Tax Assessment Act 1936
in respect of that consideration if that consideration had been incurred and paid by the recipient at the provision time;
exceeds nil; and
(c)
except where the property fringe benefit is:
(i)
an exclusive employee property benefit; or
(ia)
covered by a recurring fringe benefit declaration (see section
152A
); or
(ii)
an extended travel property benefit; or
(iii)
a car property benefit;
the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients property; and
(d)
where the property fringe benefit is an extended travel property benefit (other than an international aircrew property benefit)
-
the recipient gives to the employer, before the declaration date, a travel diary in relation to the travel undertaken by the recipient to which the fringe benefit relates; and
(da)
where:
(i)
the property fringe benefit is a car property benefit in respect of a car held by the recipient during a period (in this section called the
holding period
) in the year of tax; and
(ii)
the substantiation rules set out in Division
15
have been complied with in relation to the car in relation to the holding period;
the following conditions are satisfied:
(iii)
the recipient gives to the employer, before the declaration date, a car substantiation declaration for the car for the year of tax;
(iv)
in a case where the substantiation rules require log book records or odometer records to be maintained by or on behalf of the recipient in relation to the car
-
the car substantiation declaration is accompanied by a copy of those documents; and
(e)
if:
(i)
paragraph
(da)
does not apply; and
(ii)
the property fringe benefit is a car property benefit in respect of a car held by the recipient during a period (the
holding period
) in the year of tax;
the recipient gives a declaration to the employer, before the declaration date and in a form approved by the Commissioner, that purports to set out:
(iii)
the holding period; and
(iv)
the number of whole business kilometres travelled by the car during the holding period; and
(v)
the number of whole kilometres travelled by the car during the holding period;
the taxable value, but for Division
14
, of the property fringe benefit in relation to the year of tax is the amount calculated in accordance with the formula:
where:
TV
is the amount that, but for this subsection and Division
14
, would be the taxable value of the property fringe benefit in relation to the year of tax; and
ND
is:
(f)
if neither paragraph
(da)
nor paragraph
(e)
applies and paragraph
(k)
does not apply
-
the notional deduction; or
(g)
where paragraph
(da)
applies and paragraph
(k)
does not apply
-
whichever of the following amounts is applicable:
(i)
if it would be concluded that the amount of the recipients contribution would have been the same even if the property fringe benefit were not applied or used in producing assessable income of the recipient
-
the business use percentage of the amount that, but for this subsection and Division
14
, would be the taxable value of the property fringe benefit in relation to the year of tax;
(ii)
if subparagraph
(i)
does not apply
-
the business use percentage of the amount that, but for this subsection and Division
14
and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax; or
(h)
where:
(i)
paragraph (e) applies; and
(ii)
(Repealed by No 162 of 2015)
(iia)
paragraph
(k)
does not apply;
whichever of the following amounts is the least:
(iii)
the notional deduction;
(iv)
if it would be concluded that the amount of the recipients contribution would have been the same even if the property fringe benefit were not applied or used in producing assessable income of the recipient
-
33
⅓
% of the amount that, but for this subsection and Division
14
, would be the taxable value of the property fringe benefit in relation to the year of tax;
(v)
if subparagraph
(iv)
does not apply
-
33
⅓
% of the amount that, but for this subsection and Division
14
and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax; or
(j)
(Repealed by No 162 of 2015)
(k)
if, under subsection
138(3)
, the property fringe benefit is deemed to have been provided to the recipient only
-
the amount calculated in accordance with subsection
(5)
.
[
CCH Note:
Legislative instruments F2024L00335 and F2024L00349 made under s
123AA
of the
Fringe Benefits Tax Assessment Act 1986
and effective for the FBT year ending 31 March 2025 and all subsequent years, allow an employer to which the instruments apply to accept adequate alternative records instead of the statutory evidentiary documents referred to in ss
44(1)(c)
and
44(1)(d)
. respectively. Section 6 of each instrument sets out the adequate alternative records that can be accepted instead of the relevant statutory evidentiary document. Records can only be accepted as an alternative to the statutory evidentiary document if they are obtained and held by the employer by the employer
'
s declaration date.]
History
S 44(1) amended by No 84 of 2022, s 3 and Sch 3 items 10
-
13, by omitting
"
section 82A of the
Income Tax Assessment Act 1936
, and
"
before
"
Divisions 28 and 900 of the
Income Tax Assessment Act 1997
"
from para (b), substituting
"
that Act or the
Income Tax Assessment Act 1936
"
for
"
either of those Acts
"
in para (b), omitting
"
section 82A of the
Income Tax Assessment Act 1936
, and
"
before
"
Divisions 28 and 900 of the
Income Tax Assessment Act 1997
"
from para (ba) subpara (ii) of the definition of
"
RD
"
and substituting
"
that Act or the
Income Tax Assessment Act 1936
"
for
"
either of those Acts
"
in para (ba) subpara (ii) of the definition of
"
RD
"
, effective 1 January 2023 and applicable to the FBT year starting on 1 April 2023 and to later FBT years.
S 44(1) amended by No 162 of 2015, s 3 and Sch 1 items 12
-
14, by substituting para (e), repealing para (h)(ii) and para (j), applicable in relation to the 2016-17 FBT year and later FBT years. Para (e), (h)(ii) and (j) formerly read:
(e)
where paragraph (da) does not apply and the property fringe benefit is a car property benefit in respect of a car held by the recipient during a period (in this section also called the
holding period
) in the year of tax
-
the recipient gives to the employer, before the declaration date:
(i)
a declaration, in a form approved by the Commissioner, that purports to set out:
(A)
the holding period; and
(B)
the number of whole business kilometres travelled by the car during the holding period; and
(C)
the number of whole kilometres travelled by the car during the holding period; or
(ii)
where the average number of business kilometres per week travelled by the car during the holding period exceeded 96:
(A)
a declaration referred to in subparagraph (i); or
(B)
a declaration, in a form approved by the Commissioner, that purports to set out the holding period and includes a statement by the recipient that the average number of business kilometres per week travelled by the car during the holding period exceeded 96;
(h)(ii)
a declaration referred to in subparagraph (e)(i) has been given to the employer; and
(j)
where:
(i)
subparagraph (e)(ii) applies; and
(ii)
a declaration referred to in subparagraph (e)(i) has not been given to the employer; and
(iia)
paragraph (k) does not apply;
whichever of the following amounts is applicable:
(iii)
if it would be concluded that the amount of the recipients contribution would have been the same even if the property fringe benefit were not applied or used in producing assessable income of the recipient
-
33
⅓
% of the amount that, but for this subsection and Division
14
, would be the taxable value of the property fringe benefit in relation to the year of tax;
(iv)
if subparagraph (iii) does not apply
-
33
⅓
% of the amount that, but for this subsection and Division
14
and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax; or
S 44(1) amended by No 145 of 2008, s 3 and Sch 4 items 58 to 63, by inserting
"
and
"
at the end of paras (a), (b) and (ba), inserting
"
or
"
at the end of paras (c)(i) and (ia), inserting
"
and
"
at the end of paras (c), (d) and (e)(i)(A) and inserting
"
or
"
at the end of paras (f) and (g)(ii) of the definition of
"
ND
"
, effective 9 December 2008.
S 44(1) amended by No 145 of 2008, s 3 and Sch 4 items 24 to 30, by inserting
"
and paragraph (k) does not apply
"
after
"
applies
"
in paras (f) and (g) of the definition of
"
ND
"
, inserting
"
and
"
at the end of para (h)(ii) of the definition of
"
ND
"
, inserting para (h)(iia) in the definition of
"
ND
"
, inserting
"
and
"
at the end of para (j)(ii) in the definition of
"
ND
"
, inserting para (j)(iia) in the definition of
"
ND
"
and inserting para (k) at the end, applicable to a property benefit that is provided after 7.30pm, by legal time in the Australian Capital Territory, on 13 May 2008 (the
commencing time
). However, the amendments do not apply to a property benefit that is provided to an employee after the commencing time and before 1 April 2009 if:
(a) the benefit is provided:
(i) because the employee agreed to receive the benefit in return for a reduction in the employee
'
s salary or wages that would not have happened apart from the agreement; or
(ii) as part of the employee
'
s remuneration package, in circumstances where it is reasonable to conclude that the employee
'
s salary or wages would be greater if the benefit were not made part of that package; and
(b) the agreement was made, or the remuneration package was agreed to, before the commencing time.
S 44(1) amended by
No 143 of 2007
, s 3 and Sch 1 items 13 and 14, by omitting
"
, other than a foreign income deduction,
"
after
"
the
gross deduction
)
"
in para (b) and omitting
"
other than a foreign income deduction
"
after
"
once-only deduction
"
in para (ba)(ii), applicable in relation to income years, statutory accounting periods and notional accounting periods starting on or after the first 1 July that occurs after 24 September 2007. For savings provisions, see note under s
19(1)
.
S 44(1) amended by
No 101 of 2006
, s 3 and Sch 2 items 91
-
92, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
.
S 44(1) amended by No 178 of 1999, No 41 of 1998, No 39 of 1997, No 145 and No 30 of 1995, No 48 of 1991, No 153 of 1988 and No 139 of 1987.
44(2)
For the purposes of the application of this section in relation to a fringe benefit, where the recipient:
(a)
while undertaking travel referred to in paragraph
(1)(d)
, engages in an activity in the course of producing assessable income of the recipient; and
(b)
does not make, as mentioned in the definition of
travel diary
in subsection
136(1)
, an entry relating to the activity, being an entry of the kind referred to in that definition;
the activity shall be deemed not to have been engaged in by the recipient in the course of producing assessable income.
44(3)
(Repealed by No 162 of 2015)
History
S 44(3) repealed by No 162 of 2015, s 3 and Sch 1 item 15, applicable in relation to the 2016-17 FBT year and later FBT years. S 44(3) formerly read:
44(3)
Where:
(a)
apart from this subsection, paragraph (1)(da) applies in relation to a fringe benefit in relation to an employer in respect of a car held by the recipient during a period in a year of tax; and
(b)
whichever of the following amounts is the greater exceeds the amount that, apart from this subsection, would be ascertained under paragraph (1)(g) as representing the component ND in the formula in subsection (1):
(i)
in all cases
-
the amount that would have been ascertained under paragraph (1)(h) as representing that component if:
(A)
paragraph (1)(e) had applied in relation to the fringe benefit; and
(B)
a declaration of the kind referred to in subparagraph (1)(e)(i) had been given to the employer;
(ii)
in a case where the average number of business kilometres per week travelled by the car during the holding period exceeded 96
-
the amount that would have been ascertained under paragraph (1)(j) as representing that component if:
(A)
subparagraph (1)(e)(ii) had applied in relation to that fringe benefit; and
(B)
a declaration of the kind referred to in subparagraph (1)(e)(i) had not been given to the employer; and
(C)
a declaration of the kind referred to in sub-subparagraph (1)(e)(ii)(B) had been given to the employer;
this Act applies, and shall be deemed always to have applied, as if the amount represented by that component had been calculated as mentioned in whichever of subparagraphs (b)(i) or (ii) of this subsection is applicable.
S 44(3) amended by No 145 of 2008, s 3 and Sch 4 item 64, by inserting
"
and
"
at the end of para (b)(ii)(A), effective 9 December 2008.
S 44(3) inserted by No 139 of 1987.
44(4)
(Repealed by No 162 of 2015)
History
S 44(4) repealed by No 162 of 2015, s 3 and Sch 1 item 15, applicable in relation to the 2016-17 FBT year and later FBT years. S 44(4) formerly read:
44(4)
Nothing in section
74
prevents the amendment of an assessment for the purpose of giving effect to subsection (3).
S 44(4) inserted by No 139 of 1987.
44(5)
For the purposes of paragraph
(1)(k)
(which applies to a property fringe benefit that, under subsection
138(3)
, is deemed to have been provided to an employee only), the amount is calculated in accordance with the formula:
| Unadjusted ND
×
Employee
'
s percentage of interest |
where:
employee
'
s percentage of interest
:
(a) is the percentage of the interest held by the employee, during a period (in this subsection called the
holding period
) in the year of tax, in the asset or other thing that:
(i) is the property to which the property fringe benefit relates; and
(ii) is applied or used for the purpose of producing assessable income of the employee; and
(b) does not include the percentage of the interest held in that asset or other thing by the employee
'
s associate or associates during the holding period.
unadjusted ND
is the amount that would be ascertained as representing the component ND in the formula in subsection (1) if paragraph (1)(k) did not apply in relation to the property fringe benefit.
History
S 44(5) inserted by No 145 of 2008, s 3 and Sch 4 item 31, applicable to a property benefit that is provided after 7.30pm, by legal time in the Australian Capital Territory, on 13 May 2008 (the
commencing time
). However, the amendments do not apply to a property benefit that is provided to an employee after the commencing time and before 1 April 2009 if:
(a) the benefit is provided:
(i) because the employee agreed to receive the benefit in return for a reduction in the employee
'
s salary or wages that would not have happened apart from the agreement; or
(ii) as part of the employee
'
s remuneration package, in circumstances where it is reasonable to conclude that the employee
'
s salary or wages would be greater if the benefit were not made part of that package; and
(b) the agreement was made, or the remuneration package was agreed to, before the commencing time.
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