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  • Arrangements when a state or territory becomes the employer of employees previously employed by a statutory body

    In other situations a restructure may result in the state or territory becoming the employer of employees previously employed by a statutory authority. Where this occurs, certain steps will need to be undertaken:

    Statutory body

    The statutory body will need to:

    • lodge a final FBT return (if it ceases to be an employer), and
    • determine whether the employees have a reportable fringe benefits amount in respect to the benefits provided during the period it was the employer.

    If the statutory body lodges a final FBT return, it should print N for 'no' in response to the question about future FBT returns.

    State or territory

    The steps to be undertaken by the state or territory will depend upon whether the transferred employees will be performing their duties of employment wholly or principally in a nominated state or territory body.

    If the transferred employees will be performing their duties of employment wholly or principally in a nominated state or territory body the nominated state or territory body will become the employer of the employees.

    The nominated state or territory body will need to:

    • include the fringe benefits provided to the employees during the period it was the employer in its FBT return
    • determine whether the employees have a reportable fringe benefits amount in respect to the benefits provided during the period when it was the employer.

    Depending upon when the changes occur, the nominated state or territory body may need to consider varying their FBT instalments to include the tax that will relate to the transferred employees.

    Alternatively, if the transferred employees will not be performing their duties of employment wholly or principally in a nominated state or territory body the state or territory will need to determine whether it wants to nominate a nominated body as the employer of the employees.

    See also:

    The nomination must be made by 21 May of the relevant FBT year.
    If the change occurs after 21 May the state or territory will become the employer of the employees from the date of transfer until the end of the FBT year.

    The state or territory body will need to:

    • include the fringe benefits provided to the employees during the period it was the employer in its FBT return
    • determine whether the employees have a reportable fringe benefits amount in respect to the benefits provided during the period when it was the employer.

    Depending upon when the changes occur, the state or territory may need to consider varying their FBT instalments to include the tax that will relate to the transferred employees.

    Example: A state or territory becoming the employer of employees previously employed by a statutory authority


    On 1 October 2015, all of the employees of a statutory body (Stat Body) became employees of the state or territory.

    The change in employer does not alter the duties performed by the employees. The employees will continue to perform the duties they were previously performing for Stat Body. As the employees do not perform their duties of employment wholly or principally in a nominated body and the change occurs after 21 May, the state or territory will be the employer of the employees for the period from 1 October 2015.

    Stat Body will need to:

    • lodge a final FBT return for the period from 1 April 2015 to 30 September 2015, and
    • determine whether the employees have a reportable fringe benefits amount in respect to the benefits provided during the period from 1 April 2015 to 30 September 2015.

    The state or territory will need to:

    • consider whether a variation should be lodged in respect to its FBT instalments for the quarters ending 31 December 2007 and 31 March 2008
    • lodge a FBT return for the year ending 31 March 2008. This return will include the fringe benefits provided to the transferred employees during the period from 1 October 2007 to 31 March 2008
    • determine whether the transferred employees have a reportable fringe benefits amount in respect to the benefits provided during the period from 1 October 2007 to 31 March 2008, and
    • consider whether it wants to make a nomination in respect to the employees from 1 April 2008.
    End of example
      Last modified: 29 Nov 2016QC 20311