Fringe Benefits Tax Assessment Act 1986

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 42 TAXABLE VALUE OF IN-HOUSE PROPERTY FRINGE BENEFITS

42(1)

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Subject to this Part, the taxable value of an in-house property fringe benefit in relation to an employer in relation to a year of tax is:

(aa) if the recipient ' s property was provided to the recipient under a salary packaging arrangement - an amount equal to the notional value of the recipient ' s property at the provision time; or

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(ab) if paragraph (aa) does not apply and the benefit is an airline transport fringe benefit - an amount equal to 75 % of the stand-by airline travel value of the benefit at the time the transport starts; or

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(a) if neither paragraph (aa) nor (ab) applies and the recipient ' s property was manufactured, produced, processed or treated by the provider:

(i) if identical property that was manufactured, produced, processed or treated, as the case may be, by the provider was, at or about the provision time, sold by the provider in the ordinary course of business to purchasers being manufacturers, wholesalers or retailers - an amount equal to:

(A) if any of that identical property was, at or about the provision time, sold by the provider under an arm ' s length transaction or arm ' s length transactions - the lowest price at which it was sold under such a transaction; or

(B) if sub-subparagraph (A) does not apply - the lowest price at which any of that identical property could reasonably be expected to have been sold by the provider at or about the provision time under an arm ' s length transaction; or

(ii) if subparagraph (i) does not apply but identical property that was manufactured, produced, processed or treated, as the case may be, by the provider was, at or about the provision time, sold by the provider:

(A) in the ordinary course of business to members of the public under an arm ' s length transaction or arm ' s length transactions; and

(B) in similar circumstances and subject to identical terms and conditions (other than as to price) as those that applied in relation to the provision of the recipient ' s property to the recipient;
an amount equal to 75% of the lowest price at which that property was so sold to a member of the public; or

(iii) in any other case - an amount equal to 75% of the notional value of the recipient ' s property at the provision time; or

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(b) if none of the above paragraphs applies and the property was acquired by the provider - an amount equal to the lesser of:

(i) the arm ' s length price in respect of the acquisition of the recipient ' s property by the provider; or

(ii) the notional value of the recipient ' s property at the provision time; or

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(c) in any other case - an amount equal to 75% of the notional value of the recipient ' s property at the provision time;

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reduced by the amount of the recipient ' s contribution.

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History

S 42(1) amended by No 88 of 2013, s 3 and Sch 2 items 2 - 4, by inserting para (ab), and substituting " neither paragraph (aa) nor (ab) applies " for " paragraph (aa) does not apply " in para (a) and " none of the above paragraphs " for " neither paragraph (aa) nor (a) " in para (b), applicable in relation to the provision after 7.30 pm, by legal time in the Australian Capital Territory, on 8 May 2012 of: (a) transport in aircraft; and (b) incidental services on board aircraft.

S 42(1) amended by No 84 of 2013, s 3 and Sch 7 items 2 to 4, by inserting para (aa), substituting " if paragraph (aa) does not apply and the recipient ' s property " for " if the recipient ' s property " in para (a) and " if neither paragraph (aa) nor (a) applies " for " if paragraph (a) does not apply " in para (b), applicable in relation to benefits provided on or after 22 October 2012. However, the amendment does not apply in relation to benefits provided to an employee under an existing salary packaging arrangement to the extent that the benefits are provided before the earlier of:

(a) 1 April 2014; and

(b) the first time on or after 22 October 2012 that the existing salary packaging arrangement is varied in a material way.

For this purpose, an existing salary packaging arrangement is a salary packaging arrangement entered into by the employer and employee before 22 October 2012.

S 42(1) amended by No 88 of 2009, s 3 and Sch 5 items 293 to 303, by substituting " if the recipient ' s " for " where the recipients " in para (a), substituting " retailers - an " for " retailers, an " in para (a)(i), inserting " or " at the end of para (a)(i)(B), omitting all the words after subparagraph (a)(i)(B) in para (a)(i), substituting " if " for " where " in para (a)(ii), substituting " recipient ' s property " for " recipients property " in para (a)(ii)(B) and para (a)(iii), inserting " or " at the end of para (a)(iii), substituting para (b), substituting " recipient ' s property " for " recipients property " in para (c) and substituting " recipient ' s contribution " for " recipients contribution " , effective 18 September 2009. The words after subparagraph (a)(i)(B) in para (a)(i) formerly read:

increased, where sales tax was not, or would not have been, payable, by the provider in respect of the sale concerned, by the amount of any sales tax payable by the provider in respect of the provision of the recipient ' s property to the recipient;

Para (b) formerly read

(b) where paragraph (a) does not apply and the property was acquired by the provider - an amount equal to the lesser of:

(i) the arm ' s length price in respect of the acquisition of the recipients property by the provider increased, in a case where sales tax was not payable by the person from whom the provider acquired the property in respect of the disposal of the property to the provider, by the amount of any sales tax payable in respect of the provision of the recipients property to the recipient; or

(ii) the notional value of the recipients property at the provision time; or

42(2)
In subsection (1), arm ' s length price , in respect of the acquisition of the recipients property by the provider, means:

(a) if the recipients property was acquired by the provider in the ordinary course of business under an arm ' s length transaction - the cost price of the recipients property to the provider; or

(b) in any other case - the amount that the provider could reasonably be expected to have been required to pay to acquire the recipients property under an arm ' s length transaction in the ordinary course of business.

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