• 20.3 Residual exemptions

    Recreational facilities, child care facilities – residual benefits

    Recreational or child-minding facilities are exempt benefits if the facilities are provided on your business premises for the benefit of employees. Where such facilities are provided on business premises of a related company in a wholly owned company group, they are also exempt.

    Use of property – residual benefits

    Where plant or equipment located on your business premises is used wholly or principally in connection with the operation of that business, any private use of that plant by an employee on those premises is an exempt benefit – for example, private telephone calls. This exemption applies regardless of whether the plant or equipment is used on a working or a non-working day.

    The limited use of equipment off your business premises qualifies for exemption provided the equipment is ordinarily located on those premises or at your worksite for use in connection with business operations. This exemption would extend, for example, to business equipment that an employee borrows to use overnight or at weekends. A power tool or personal computer taken home in these circumstances would give rise to an exempt benefit – however, the exemption doesn't extend to use of one of your motor vehicles.

    The use by employees of amenities, such as tea making or coffee making facilities, vending machines and water dispensers located on the business premises is also exempt from FBT.

    Child care facility, priority of access – residual benefits

    Payments you make to obtain priority access to certain child care facilities for children of employees may be exempt benefits.

    The payments must be made under a program administered by the relevant government department to a child care service that is one of the following:

    • an eligible child care centre for the purposes of any provision of the Child Care Act 1972
    • family day care
    • care outside school hours
    • care in school vacations.

    Residual benefits – no-private-use declaration

    A residual benefit that is covered by a No-private-use declaration - residual benefits is an exempt benefit.

    A condition of the exemption is that the residual benefit arises from the use of property that is subject to a consistently enforced prohibition on private use and that, as such, under the 'otherwise deductible' rule, would have a taxable value of nil.

    In such instances, you will then be able to make an annual declaration. The declaration must cover all residual benefits provided to employees where you are able to state that the benefits were provided only for employment-related purposes and there was no private portion.

    The declaration must be in a form approved by the Commissioner of Taxation and be made by the date your FBT return is due to be lodged (refer to Declarations).

      Last modified: 05 May 2017QC 17820