ATO Interpretative Decision
ATO ID 2001/332
Fringe Benefits Tax
Fringe Benefits Tax : Religious Practitioner's ExemptionFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether the provision of accommodation, the use of a car and the use of a corporate credit card given by the church to the retired pastor are exempt benefits under section 57 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).
Decision
Yes. The benefits provided are exempt benefits in terms of section 57 of the FBTAA.
Facts
The employer is a church and the employee is a pastor of the church who has recently retired from active pastoral duties.
During the years of active ministry, the pastor was not involved in the day to day management of the church but has a primary role in preaching, teaching and propagating religious beliefs and pastoral care and defining the spiritual direction of the church.
The pastor's remuneration has been a combination of salary and fringe benefits including the provision of accommodation and the use of a car.
The church now wishes to formally retire the pastor from active ministry.
The church proposes to continue to provide the accommodation and the use of a car for the pastor on retirement.
The retired pastor will also be allowed the use of a corporate credit card up to an amount of $1000 per week to meet living expenses.
Reasons for Decision
The provision of accommodation, the use of a car and the use of the church's credit card are "benefits" as defined in subsection 136(1) of the FBTAA.
These benefits are being provided by the church to the pastor who has been a religious practitioner and a "former employee" as defined in subsection 136(1) of the FBTAA.
Paragraphs 9 and 10 of Miscellaneous Taxation Ruling MT 2016 supports the view that in relation to former employees, the reference to "duties of the employee" is a reference to the former duties of the former employee.
These benefits are being provided principally in respect of pastoral duties or duties directly related to the teaching and propagation of religious beliefs under paragraph 57(d) of the FBTAA.
Paragraph 27 of Taxation Ruling TR 92/17 addresses what is meant by the word "principally" as stated in paragraph 57(d) of the FBTAA. It states that a benefit provided to a minister of religion whose duties are exclusively or predominantly pastoral generally satisfies the "principally" test. As the pastor was uninvolved in the day to day running of the church, but was extensively involved in leading, preaching, teaching and propagating religious beliefs and pastoral care, this test is satisfied.
Therefore the provision of accommodation, the use of a car and the $1000 a week in the form of goods or services paid for by way of the church's credit card to the retired pastor are benefits that are exempt from fringe benefits tax under section 57 of the FBTAA.
Date of decision: 9 August 2001
Legislative References:
Fringe Benefits Tax Assessment Act 1986
Section 57
Paragraph 57(d)
Subsection 136(1)
Miscellaneous Taxation Ruling MT 2016
TR 92/17
Keywords
Fringe benefits tax
Fringe benefits
Exempt benefits
FBT employees of religious institutions
FBT religious practitioners
FBT religious institutions
Date reviewed: 21 January 2014
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 9 August 2001 | Original statement |
| 31 October 2014 | Updated statement |