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  • Employees of a state or territory, or a nominated body, become employees of a newly created statutory body

    A change in structure may involve a statutory body being created to undertake functions previously undertaken by a nominated body. Where employees previously employed by the state or territory become employees of a statutory body certain steps will need to be undertaken by the statutory body and the previous employer.

    Statutory body

    a. Newly created statutory body

    A statutory body which comes into existence at the time the employees are transferred will need to:

    • complete and lodge Fringe benefits tax: Application to register
    • lodge a FBT return for the fringe benefits provided to employees from the date on which it became the employer until the following 31 March
    • determine whether the employees have a reportable fringe benefits amount in respect to the benefits provided during the period it was the employer.

    It will not become liable to pay instalments until after it has lodged its first FBT return.

    b. Transfer to existing statutory body

    Where the employees are transferred into an existing statutory body, the statutory body will need to:

    • include the fringe benefits provided to the employees during the period it is 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 it is the employer.

    Depending upon when the employees are transferred, the statutory body may need to consider varying its FBT instalments to include the tax that will relate to the transferred employees.

    Previous employer

    The previous employer may be the state or territory, or it may be a nominated body. It will need to:

    • lodge a final FBT return (if it ceases to exist)
    • 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 previous employer lodges a final FBT return, it should print N for 'no' in response to the question about future FBT returns.

    Example: Creation of statutory body and abolition of nominated body
    On 1 October 2015, with the incorporation of a statutory body (New Stat) and abolition of a department (Department Ex), all the employees previously working for Department Ex became employees of New Stat.

    As New Stat is a government body that is an employer in its own right it is not subject to the arrangements that apply to a nominated state or territory body. Consequently, New Stat will not have an FBT liability until it lodges an FBT return for the year ending 31 March 2016.

    New Stat will need to:

    • complete and lodge Fringe benefits tax: Application to register
    • lodge a FBT return for the year ending 31 March 2016. This return will include the fringe benefits provided during the period from 1 October 2015 to 31 March 2016. If the FBT liability on this assessment is at least $3,000, New Stat will become liable to pay instalments in the year ending 31 March 2017,
    • lodge a final FBT return for the period from 1 April 2015 to 30 September 2015 for Department Ex (unless it has already completed this), and
    • determine whether the employees have a reportable fringe benefits amount in respect to the benefits provided during the period Department Ex 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.

    End of example
      Last modified: 29 Nov 2016QC 20311