ATO Interpretative Decision
ATO ID 2001/222 (Withdrawn)
Fringe Benefits Tax
Fringe benefits tax: Living Away From Home AllowanceFOI status: may be released
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This ATOID has been withdrawn on the basis that the issue is adequately covered by MT 2030.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is an allowance provided to the employee a Living Away From Home Allowance (LAFHA) Benefit as defined in section 30 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) where the employee lives (in rented accommodation) and works in Town B during the week but lives in the family home in City A during the weekends?
Decision
Yes, the allowance paid to the employee is a LAFHA Benefit as defined in section 30 of the FBTAA.
Facts
Prior to commencing employment with the employer, the employee lived in City A in the family home.
The employee then commenced full time employment in Town B with the employer whose business is located in Town B.
The employee's family continues to live at the family home in City A.
The employee lives in rented accommodation in Town B during the week and returns to live in the family home in City A at weekends.
The employment arrangement is for an indefinite period, pending the employee's ability to meet performance standards set by the employer.
The employee intends to eventually return to City A to live with the family.
Reasons for Decision
For the allowance to be a LAFHA the employee must be living away from his or her usual place of residence.
Paragraph 14 of Miscellaneous Taxation Ruling MT 2030 states that:
the question whether an employee is living away from his or her usual place of residence normally involves a choice between two places of residence, i.e., the place where the employee is living at the time or some other place. A person is regarded as living away from a usual place of residence if, but for having to change residence in order to work temporarily for his employer at another locality, the employee would have continued to live at the former place. It would be relevant in reaching that view that there is an intention or expectation of the employee returning to live at the former place of residence on cessation of work at the temporary job locality.
From the facts, the employee's house in City A would be regarded as the employee's usual place of residence. The employee is only renting accommodation in Town B and had the employee not got the job, would have remained living in the house in City A. The employee has kept ties with this house in that the employee's family remain living there and the employee travels back to this house each weekend.
Under these circumstances, an allowance paid to the employee to compensate the employee for additional accommodation costs incurred because of being required to live away from what is that employee's usual place of residence in City A, would qualify as a LAFHA Benefit under section 30 of the FBTAA.
Date of decision: 12 June 2001
Legislative References:
Fringe Benefits Tax Assessment Act 1986
section 30
Related Public Rulings (including Determinations)
Miscellaneous Taxation Ruling MT 2030
Keywords
Fringe benefits tax
Fringe benefits
Living away from home allowance fringe benefits
Living away from home allowances
FBT Living away from home
ISSN: 1445-2782
| Date: | Version: | |
| 12 June 2001 | Original statement | |
| You are here | 1 April 2004 | Archived |