ATO Interpretative Decision
ATO ID 2003/7 (Withdrawn)
FBT
Fringe benefits tax: Third party recipient deemed to be an associate - same sex partner of an employeeFOI status: may be released
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This ATO ID is withdrawn from the database because it contains a view in respect of a provision of the Fringe Benefits Tax Assessment Act 1986 that does not apply from 1 April 2009. This is as a result of changes contained in the Same Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Refrom) Act 2008. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions up to and including 31 March 2009.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the benefit provided by an employer to its employee's same sex partner a 'fringe benefit' as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
Yes. The same sex partner is deemed to be an associate of the employee under subsection 148(2) of the FBTAA.
Facts
The employer is a company and has employees.
One of the employees of the company has a partner who is of the same sex as the employee. They live together. The employee's partner (the partner) is not an employee of the company.
The company provides the partner with the use of a car. The car is owned and maintained by the company.
By reason of the employment relationship between the company and the employee, the partner has the use of the company car.
The employee and the company have an agreement which recognises that the partner has the use of the company car.
Reasons for Decision
A 'fringe benefit' is defined in subsection 136(1) of the FBTAA. A 'fringe benefit' is a benefit that is provided by an employer or associate of the employer, to an employee or an associate of the employee, in respect of the employment of the employee.
The benefit is the use of the car by the partner. The partner is not an employee of the employer. The provider of the benefit is the employer. The benefit is provided in respect of the employment of the employee.
Because the other requirements of the definition of 'fringe benefit' are satisfied, provided that the partner is an associate of the employee, the car benefit will be a 'fringe benefit'.
Subsection 136(1) of the FBTAA 'associate' defined
Subsection 136(1) of the FBTAA provides a definition of 'associate'. 'Associate' has the same meaning in relation to a person as that expression has in relation to a person in section 26AAB of the Income Tax Assessment Act 1936 (ITAA 1936).
Section 26AAB of the ITAA 1936 provides that a 'relative' of a person will be an 'associate' of that person.
'Relative', in relation to a person, is defined in subsection 6(1) of the ITAA 1936 and includes the spouse of that person.
'Spouse', in relation to a person, is defined in subsection 6(1) of the ITAA 1936. 'Spouse', in relation to a person, would not include his or her same sex partner (Refer also to ATO Interpretative Decision 2002/649 which contains further analysis of why in relation to a person, a same sex partner could not be that person's spouse).
The partner is not an 'associate' of the employee because he or she is not the 'spouse' of the employee. As the partner does not fall within any other class of 'associate' contained within section 26AAB of the ITAA (for example by certain business relationships), then the partner is not an 'associate' of the employee as defined in subsection 136(1) of the FBTAA.
Subsection 148(2) of the FBTAA 'third party recipient' deemed to be an 'associate'
Subsection 148(2) of the FBTAA provides an additional class or category of 'associate' for the purposes of the FBTAA. Subsection 148(2) of the FBTAA contains a deeming provision which would need to be considered if a benefit was not provided to an employee or 'associate' of the employee. That is 'associate' as defined in subsection 136(1) of the FBTAA. In the present case, subsection 148(2) of the FBTAA would need to be considered.
Subsection 148(2) of the FBTAA deems a third party to be an 'associate' of an employee where the third party receives a benefit provided under an 'arrangement' between the employer and the employee.
An 'arrangement' is defined in subsection 136(1) of the FBTAA and includes agreements, arrangements and promises. An 'arrangement' is discussed at paragraphs 24 to 26 of Taxation Ruling TR 1999/5.
As the employee and the company have an agreement which recognises that the partner has the use of the company car there is an 'arrangement' in place between the employer and the employee to provide the benefit to the partner.
As a consequence, the partner is deemed to be an 'associate' of the employee under subsection 148(2) of the FBTAA. The car benefit provided by the employer to the partner is therefore a benefit provided to an 'associate' of the employee.
Accordingly, the car benefit is a 'fringe benefit' in accordance with subsection 136(1) of the FBTAA.
Date of decision: 19 December 2002Year of income: Year ended 31 March 2002
Legislative References:
Fringe Benefits Tax Assessment Act 1986
subsection 136(1)
subsection 148(2)
subsection 6(1)
subsection 26AAB(14)
Related Public Rulings (including Determinations)
Taxation Ruling TR 1999/5
ATO ID 2002/649
Keywords
Car fringe benefits
Fringe benefits tax
Fringe benefits
FBT arrangement
FBT associates
ISSN: 1445-2782
| Date: | Version: | |
| 19 December 2002 | Original statement | |
| You are here | 30 April 2010 | Archived |