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  • Nominated state or territory body ceases to exist

    The four steps below need to be completed when a nominated state or territory body ceases to exist and the employees are transferred to another body.

    Step 1: Lodge and pay final FBT return

    The nominated state or territory body ceasing to exist will need to lodge a final FBT return and pay the amount of tax due. This return must be lodged by 21 May following the date the state or territory body ceased to exist.

    When lodging the final FBT return, print N for 'no' in response to the question about future FBT returns.

    Step 2: Work out if the employees have reportable fringe benefits amounts

    To work out if the employees have a reportable fringe benefits amount, calculate each employee's share of the reportable fringe benefits for the period from 1 April to the date on which the nominated body ceased to exist.

    If the value exceeds the reporting threshold, the grossed-up taxable value of those benefits must be recorded on the employee's payment summary or reported through Single Touch Payroll (STP) for the corresponding income year (1 July to 30 June).

    Where an employee has more than one employer during an FBT year as a result of a nominated body ceasing to exist, each of the employers will separately apply the reporting threshold.

    Example: Application of the reporting threshold

    An employee of a nominated body that ceases to exist on 31 January 2019 received benefits with a reportable value of $4,000 from the ceased body. In addition, the employee received benefits with a reportable value of $800 while undertaking duties for a second department during the period from 1 February to 31 March 2019.

    As the value of the benefits provided by the ceased body exceeds the reporting threshold, the value of reportable benefits ($4,000) will be reported on the payment summary provided by the ceased body, or through STP, for the year ended 30 June 2019.

    The benefits received from the second employer ($800) will not be reported, as the amount received is less than the reporting threshold.

    Note: Where an employee has a reportable fringe benefits amount for fringe benefits provided by a nominated body that ceases to exist between 1 April and 30 June, ensure that the amount is reported on a payment summary or through STP for the following income year.

    End of example

    Step 3: Work out if a section 135X agreement is needed

    Where there is a change in employer, the FBT treatment of certain benefits may be affected. A section 135X agreement allows the treatment of certain benefits to remain the same (see Consider a section 135X agreement).

    Step 4: Determine requirements that apply to the new employer

    The requirements that apply to the new employer depend on whether the employees are transferred to a:

    Body eligible for nomination but not yet nominated

    If the employees are transferred to a body that is eligible for nomination but has not been nominated (for example, a new body created on the day the previous body ceased to exist), the state or territory will:

    • nominate the new body as the employer if the changes occur before 21 May, (see How to make a nomination), or
    • allocate the notional tax to the state or territory (refer to steps 2 and 3 of New body created).
    Body previously nominated as an employer

    If the employees are transferred to a body previously nominated as an employer the nominated body will need to vary the FBT instalment shown on its next activity statement to include the notional tax that relates to the transferred employees.

    See also:

    Separate government body – employer in its own right

    If the new employer is a separate government body that does not come within the nomination provisions it will not become liable to pay instalments in relation to the transferred employees until it lodges an FBT return for the relevant FBT year.

    See also:

      Last modified: 06 Dec 2019QC 20311