• 20.4 Relocation exemptions

    Living-away-from-home accommodation - expense payments

    Legislative reference: section 21External Link of the FBTAA.

    Rather than paying a cash living-away-from-home allowance to an employee whose duties of employment require them to live away from their normal residence, you may prefer to reimburse the employee for the accommodation expenses or pay these expenses on behalf of the employee – that is, as with an expense payment fringe benefit.

    In these circumstances, the payment is an exempt benefit where the living-away-from-home accommodation requirements below are met.

    Living-away-from-home accommodation - requirements

    To apply the living-away-from-home accommodation - expense payments and/or residual benefits - exemptions, the following requirements must be met:

    If.. Then..

    The employee works on a fly-in fly-out or drive-in drive-out basis

    • the employee must have residential accommodation at or near their usual place of employment; and
    • the employee must give you a declaration about living away from home

     

    The employee does not work on a fly in fly out or drive in drive out basis and is not eligible for the transitional rules

    • the employee must maintain a home in Australia at which they usually reside and it is available for their use and enjoyment at all times
    • the fringe benefit must relate to the first 12 month period at a particular work location, and
    • the employee must give you a declaration about living away from home.

     

    Attention

    The declarations provided to you must be in a form approved by the Commissioner (refer to Declarations).

    End of attention

    Transitional rules may apply which affect the requirements above –these transitional rules are outlined below.

    If your employee is… Then this employee…

    A temporary or foreign resident who:

    • had an eligible employment arrangement:
      • in place before 7.30pm (AEST) on 8 May 2012, and
      • that was not materially varied or renewed between 7.30pm on 8 May 2012 and 1 October 2012, and
       
    • maintained a home in Australia for their immediate use and enjoyment at all times during the period their duties of employment required them to live away from it

     

    is not limited to the LAFHA concessions for 12 months until the earlier of:

    • 1 July 2014
    • the date of a material variation in the eligible employment arrangement,
    • the date of renewal of the eligible employment arrangement, or
    • the date the eligible employment arrangement ends.

     

    Neither a temporary or a foreign resident and had an eligible employment arrangement:

    • in place before 7.30pm (AEST) on 8 May 2012 and
    • that was not materially varied or renewed from 7.30pm on 8 May 2012 up to and including 30 September 2012

     

    • is not required to maintain a home in Australia
    • is not limited to the LAFHA concessions for 12 months.

    This is until the earlier of:

    • 1 July 2014
    • the date of a material variation in the eligible employment arrangement
    • the date of renewal of the eligible employment arrangement, or
    • the date the eligible employment arrangement ends.

    Note: the 12-month period starts from 1 October 2012 for the purposes of the transitional rules, regardless of the date of any renewal or material variation.

    Attention

    The terms temporary resident and foreign resident have their meaning given by section 995-1 of the Income Tax Assessment Act 1997. The meaning of temporary resident can also be found by referring to Foreign income exemption for temporary residents – introduction

    Declarations are still required where the transitional rules apply – the declarations provided to you must be in a form approved by the Commissioner (refer to Declarations).

    End of attention
    Further information

    For information about:

    End of further information

    Accommodation provided because the employee was living away from home before 1 October 2012

    Where you reimbursed the employee for their accommodation expenses or paid the expenses on behalf of the employee because they were living away from home before 1 October 2012, the payment was an exempt benefit where you obtained the appropriate declaration from the employee in the form approved by the Commissioner (refer to Declarations).

      Last modified: 08 Jan 2014QC 17820