INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 51AJ   DEDUCTIONS NOT ALLOWABLE FOR PRIVATE COMPONENT OF CONTRIBUTIONS FOR FRINGE BENEFITS ETC.  

51AJ(1)  
Where:


(a) any of the following benefits is provided in respect of the employment of an employee of an employer:


(i) an airline transport benefit;

(ii) a board benefit;

(iii) a loan benefit;

(iv) a property benefit;

(v) a residual benefit;


(b) the benefit is:


(i) a fringe benefit; or

(ii) a benefit that, but for paragraph (g) of the definition of fringe benefit in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 , would be a fringe benefit;


(c) in the case of a loan benefit - the taxpayer, being the recipient or the employee, incurs interest (in this section called the recipients interest ) in respect of the loan;


(d) in the case of a benefit other than a loan benefit - the taxpayer, being the recipient or the employee, incurs consideration (in this section called the recipients contribution ) to the provider or to the employer in respect of the provision of the recipients transport, the recipients meal, the recipients property or the recipients benefit, as the case may be;


(e) it would be concluded that, in calculating the amount of the recipients interest, or the amount of the recipients contribution, as the case may be, the provider or the employer made an allowance for a particular level of application or use of the benefit in producing assessable income of the taxpayer; and


(f) it would be concluded that the amount of the recipients interest, or the amount of the recipients contribution, as the case may be, would have been greater if it had been calculated without making that allowance;

the following provisions have effect:


(g) if the extent of the application or use of the benefit concerned in producing assessable income of the taxpayer is equal to, or less than, that level - a deduction is not allowable to the taxpayer under this Act in respect of the recipients interest or the recipients contribution;


(h) if the extent of the application or use of the benefit concerned in producing assessable income of the taxpayer exceeds that level - the amount of the deduction that, but for this section, has been allowed or would be allowable to the taxpayer under this Act in respect of the recipients interest or the recipients contribution shall not exceed the amount calculated in accordance with the formula:


D   -   A


where:
  • D is the amount of the deduction that, but for this section, would have been allowable to the taxpayer under this Act in respect of the amount of the recipients interest or the amount of the recipients contribution if it had been calculated without making that allowance; and
  • A is the amount of that allowance.
  • 51AJ(2)  


    Expressions (other than " recipients contribution " and " fringe benefit " ) used in this section and in the Fringe Benefits Tax Assessment Act 1986 have the same respective meanings in this section as they have in that Act.

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