ATO Interpretative Decision
ATO ID 2002/412
Fringe Benefits Tax
Exempt remote area housing benefitsFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether the provision of a housing benefit to the employee in a remote area by the employer who enters into a rental agreement with a landlord for a residential property immediately after the termination of a previous rental agreement of that same property between the employee and the landlord, will invoke the application of subparagraph 58ZC(2)(e)(ii) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
No, the provision of a housing benefit to the employee in a remote area by an employer who enters into a rental agreement with a landlord for a residential property immediately after the completion of a previous rental agreement of that same property between the employee and the landlord, will not invoke the application of subparagraph 58ZC(2)(e)(ii) of the FBTAA.
Facts
An employer customarily provides residential accommodation to staff in remote areas.
The employer employs a manager under a contract basis.
The employee currently leases a house privately and pays the rent from after tax earnings.
The employer proposes to enter into a new rental agreement with the landlord immediately after the completion of the employee's rental agreement on the same property with the same landlord and provide a housing benefit to the employee as the employee's usual place of residence.
Reasons for Decision
Where the employer is located in a remote area, the employer provides accommodation to its employees as their usual place of residence and the requirements of section 58ZC of the FBTAA are satisfied, the housing benefit is an exempt remote housing benefit.
A housing benefit provided to an employee by an employer, as a result of the completion of an existing rental agreement between the employee and the landlord and entering into a new lease agreement between the employer and the same landlord on an arm's length basis on the same property, will not invoke the application of subparagraph 58ZC(2)(e)(ii) of the FBTAA to disentitle the remote area housing benefit exemption provided under section 58ZC of the FBTAA.
The housing right acquired by the employer through the new rental agreement entered into with the landlord and subsequently provided to the employee will not represent an arrangement that was entered into for the purpose or for the purposes that included the purpose of enabling the employer to obtain the benefit of the application of this section.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 25 January 2018 | Title | Change of title to Fringe Benefits Tax and removal of Fringe Benefits Tax from subtitle |
| 13 February 2015 | Decision | Changing the wording of "termination to completion" |
| Facts | Changing the wording of "termination to completion" | |
| Reasons for Decision | Changing the wording of "termination to completion" | |
| Changing the wording "of the commencement of to entering into" | ||
| Changing the word "landlord at an arm's length to landlord on an arm's length" | ||
| Changing the word "employee does not necessarily represent to employee will not represent" | ||
| Keywords | Housing benefit - insert
Fringe benefits - insert Remote area housing exemption - insert |
Year of income: Year ended 31 March 2002
Legislative References:
Fringe Benefits Tax Assessment Act 1986
Section 58ZC
Subparagraph 58ZC(2)(e)(ii)
ATO ID 2001/761
Keywords
Housing benefit
Fringe benefits
Remote area housing exemption
Remote housing fringe benefits
Date reviewed: 8 January 2018
ISSN: 1445-2782
| Date: | Version: | |
| 6 June 2001 | Original statement | |
| 13 February 2015 | Updated statement | |
| You are here | 25 January 2018 | Updated statement |