Tax Laws Amendment (2012 Measures No. 4) Act 2012 (142 of 2012)

Schedule 1   Reform of living away from home allowance and benefit rules

Part 1   Main amendment

Fringe Benefits Tax Assessment Act 1986

1   Subdivision B of Division 7 of Part III

Repeal the Subdivision, substitute:

Subdivision B - Taxable value of living-away-from-home allowance fringe benefits

31 Taxable value - employee maintains a home in Australia

(1) This section applies to a living-away-from-home allowance fringe benefit covered by subsection 30(1) in relation to a year of tax to the extent that the employee satisfies all of the following for the fringe benefit and the period to which it relates:

(a) section 31C (about maintaining an Australian home);

(b) section 31D (about the first 12 months);

(c) section 31F (about declarations).

(2) Subject to this Part, the taxable value of the fringe benefit in relation to the year of tax is the amount of the fringe benefit reduced by:

(a) any exempt accommodation component; and

(b) any exempt food component.

(3) Paragraph (2)(b) does not apply to the extent that the fringe benefit relates to a period during which the employee resumes living at his or her normal residence.

(4) Neither paragraph (2)(a) nor (b) applies to the extent that the period to which the fringe benefit relates happens while the 12-month period referred to in subsection 31D(1) is paused.

Note: The employer may pause that 12-month period (see paragraph 31D(2)(a)).

31A Taxable value - fly-in fly-out and drive-in drive-out employees

(1) This section applies to a living-away-from-home allowance fringe benefit covered by subsection 30(1) in relation to a year of tax to the extent that the employee satisfies all of the following for the fringe benefit and the period to which it relates:

(a) the requirement that the employee has residential accommodation at or near his or her usual place of employment;

(b) section 31E (about extra requirements for these employees);

(c) section 31F (about declarations).

(2) Subject to this Part, the taxable value of the fringe benefit in relation to the year of tax is the amount of the fringe benefit reduced by:

(a) any exempt accommodation component; and

(b) any exempt food component.

31B Taxable value - any other case

(1) This section applies to a living-away-from-home allowance fringe benefit in relation to a year of tax to the extent that neither section 31 nor 31A applies to the fringe benefit and the period to which it relates.

(2) Subject to this Part, the taxable value of the fringe benefit in relation to the year of tax is the amount of the fringe benefit.

Subdivision C - Related provisions

31C Maintaining a home in Australia

The employee satisfies this section if:

(a) the place in Australia where the employee usually resides when in Australia:

(i) is a unit of accommodation in which the employee or the employee's spouse has an ownership interest (within the meaning of the Income Tax Assessment Act 1997); and

(ii) continues to be available for the employee's immediate use and enjoyment during the period that the duties of that employment require the employee to live away from it; and

(b) it is reasonable to expect that the employee will resume living at that place when that period ends.

31D First 12 months employee is required to live away from home

(1) The employee satisfies this section if the fringe benefit relates only to all or part of the first 12 months that the duties of that employment require the employee to live away from the place in Australia where he or she usually resides when in Australia.

(2) Each of the following paragraphs applies for the purposes of subsection (1):

(a) the employer may pause the 12-month period;

(b) start a separate 12-month period if:

(i) the employer later requires the employee to live at another location for the purposes of that employment; and

(ii) it would be unreasonable to expect the employee to commute to that other location from an earlier location for which the employer provided a benefit of the same kind to the employee;

(c) other changes in the nature of that employment are irrelevant;

(d) treat as one employer any of the employee's earlier employers that is or has been an associate of the current employer.

31E Fly-in fly-out and drive-in drive-out requirements

The employee satisfies this section if:

(a) the employee, on a regular and rotational basis:

(i) works for a number of days and has a number of days off (but not the same days in consecutive weeks); and

(ii) on completion of the working days, travels from his or her usual place of employment to his or her normal residence and, on completion of the days off, returns to that usual place of employment; and

(b) the basis of work described in paragraph (a) is customary for employees performing similar duties in that industry; and

(c) it would be unreasonable to expect the employee to travel on a daily basis on work days between:

(i) his or her usual place of employment; and

(ii) his or her normal residence;

having regard to the location of those places; and

(d) it is reasonable to expect that the employee will resume living in his or her normal residence when the duties of that employment no longer require him or her to live away from it.

31F Declarations

(1) The employee satisfies this section if the employee gives the employer a declaration, in a form approved by the Commissioner, purporting to set out:

(a) for a fringe benefit to which section 31 (about employees who maintain an Australian home) applies:

(i) the address of the place in Australia where the employee usually resides when in Australia; and

(ii) that section 31C is satisfied for that place; and

(iii) the address of each place where the employee actually resided during the period to which the benefit relates; or

(b) for a fringe benefit to which section 31A (about employees who fly-in fly-out or drive-in drive-out) applies:

(i) the address of the employee's usual place of residence; and

(ii) that paragraph 31E(d) is satisfied for the employee's normal residence; and

(iii) the address of each place where the employee actually resided during the period to which the benefit relates.

(2) The employee must give the employer the declaration before the declaration date for the year of tax during which the benefit was provided.

31G Substantiating related expenses

(1) This section applies to the following expenses incurred by the employee:

(a) an expense for the accommodation of eligible family members during the period to which a living-away-from-home allowance fringe benefit relates;

(b) an expense for food or drink for eligible family members during the period to which a living-away-from-home allowance fringe benefit relates, if the total of those food or drink expenses for that period exceeds the amount the Commissioner considers reasonable.

(2) The employee substantiates the expense if the employee:

(a) before the declaration date for the year of tax during which the fringe benefit was provided, gives the employer:

(i) documentary evidence of the expense, or a copy; or

(ii) a declaration, in a form approved by the Commissioner, purporting to set out information about the expense; and

(b) if the employee gives a declaration under subparagraph (a)(ii) - retains documentary evidence of the expense for a period of 5 years starting at that declaration date.

Note: Substantiating expenses increases the exempt accommodation component, and exempt food component, for working out the taxable value of the relevant fringe benefit.

31H Exempt food component

(1) The exempt food component , in relation to a living-away-from-home allowance fringe benefit, is so much of the result of subsection (2) as is equal to the total of the expenses that:

(a) are incurred by the employee for food or drink for eligible family members during the period to which the fringe benefit relates; and

(b) if section 31G applies to the expenses - are substantiated under that section.

(2) Work out the result of the following:

Food component - Applicable statutory food total

where:

applicable statutory food total means the total of the statutory food amounts for eligible family members for the period to which the fringe benefit relates, reduced (but not below zero) by any amount that:

(a) might reasonably be expected to be the total normal food or drink expenses for those eligible family members had they remained living in their normal residence during that period; and

(b) was taken into account in working out the food component.