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Edited version of administratively binding advice
Authorisation Number: 1012146894348
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Subject: Section 135X Agreement
Question
Can the new employers use the records kept by the previous employer?
Answer
Yes.
The scheme commenced on
1 July 2011
Relevant facts
Following disaggregation you transferred employees to various departments.
Prior to disaggregation, you
· kept a register in relation to the value of car parking fringe benefits for the purpose of using the 12 week record keeping method in Subdivision D of Division 10A of the FBTAA
· treated benefits as exempt benefits under sections 58B, 58C, 58D or 58S of the FBTAA, as a result of the relocation of employees
· treated fringe benefits relating to remote area home schemes under section 65CA of the FBTAA as amortised fringe benefits
· kept recurring fringe benefits declarations
· kept log books, and
· treated a year of tax as a base year of tax for the purposes of section 26 of the FBTAA.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 Section 135S
Fringe Benefits Tax Assessment Act 1986 Section 135X
Reasons for decision
Section 135X of the FBTAA enables the Commissioner to enter into a written agreement with a State or Territory regarding the application of certain provisions in certain circumstances.
The Explanatory Memorandum to Taxation Laws Amendment Bill (No. 2) 2011 which inserted section 135X into the FBTAA stated the section had two objects:
· the first is to ensure the calculation of certain fringe benefits is not affected as a result of a break in the continuity of certain record keeping requirements solely because of a 'transitional event', and
· the second is to preserve the character of certain benefits where the character would otherwise be lost solely because of a 'transitional event'.
Subsection 135X(2) of the FBTAA states that a transitional event occurs if:
· a State of Territory makes a nomination under section 135S
· a State or Territory varies a nomination under section 135S
· a State or Territory revokes a nomination under section 135S, or
· a nominated State or Territory body ceases to exist.
As you made a nomination under section 135S of the FBTAA it is considered appropriate to enter into a section 135X agreement to allow the new employers to:
· treat a register that would have been a valid register for the previous employer as a valid register for the purpose of using the 12 week record keeping method to calculate the value of car parking fringe benefits in Subdivision D of division 10A of the FBTAA
· treat a benefit relating to the relocation of an employee that would have been an exempt benefit for the previous employer under sections 58B, 58C, or 58D of the FBTAA as an exempt benefit
· use the end date which would have been used by the previous employer for the purpose of calculating the amortisation of the taxable value of fringe benefits relating to a remote area home ownership scheme under section 65CA of the FBTAA
· use a recurring fringe benefit declaration which would have applied if the employer had not changed
· treat a year which would have been a log book year of tax for the previous employer as a log book year for the purpose of using section 10 of the FBTAA to calculate the taxable value of a car fringe benefit, and
· treat a year which would have been a base year of tax for the previous employer as a base year for the purpose of calculating the taxable value of a housing fringe benefit under section 26 of the FBTAA.
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