Relocation - engagement of relocation consultant
Legislative reference: section 58AAExternal Link of the FBTAA.
From 1 April 2006, if a relocation consultant is used to help relocate an employee, or their family members, you may be eligible to access a FBT exemption for costs associated with the engagement of the relocation consultant.
A relocation consultant is a person who helps an employee, or their family members, move and settle into a new location.
In order for a benefit, consisting of the engagement of a relocation consultant, to qualify as a FBT exempt benefit, the following conditions must be met:
- the engagement of the relocation consultant must be an expense payment or residual benefit
- the engagement of the relocation consultant must be in respect of the employment of your employee
- the benefit is provided under an arm’s length arrangement
- if the benefit is an expense payment benefit – documentary evidence is provided to you before the date your employee declarations are due (refer to section 4.1 of Fringe benefits tax record keeping)
- the engagement of the relocation consultant is required solely for one or more of the following reasons
- the employee is required to live away from home in order to fulfil their employment duties
- the employee returns to their usual place of residence, having previously been relocated from their usual place of residence, in order to fulfil his or her employment
- the employee, having previously been relocated from their usual place of residence, returns to their usual place of residence because they cease to perform the employment duties he or she had previously been relocated for
- in order to fulfil their duties of employment, the employee moves from his or her usual place of residence.
Any expenses a relocation consultant pays on behalf of an employee or their family member is not exempt from FBT.
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The common services a relocation consultant can provide to help an employee (or their family member) relocate include:
- obtaining removalist quotes
- finding accommodation, including temporary accommodation
- lease negotiation
- providing information about transportation to the new location
- providing information about education and community services at the new location.
Relocation advice provided incidental to the provision of another good or service – for example, by real estate agents – doesn't qualify for this exemption, but may qualify for other relocation exemptions.
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Jenny is an employee of Zig & Co Mining in Lightning Ridge. She is required to move from Lightning Ridge to Kalgoorlie in order to perform her duties as a geologist. Her employer engages a relocation consultant to help Jenny relocate.
The relocation consultant:
- provides accommodation and transportation quotes
- arranges and pays for six months of furniture rental
- provides information about medical facilities at Kalgoorlie.
Zig & Co Mining is eligible for a FBT exemption for the costs involved in engaging the relocation consultant to provide information about and arranging for Jenny’s relocation to Kalgoorlie – however, Zig & Co Mining is not eligible for an FBT exemption for the six-month furniture rental because this expense was paid by the relocation consultant on Jenny’s behalf.
End of example