Edited version of your private ruling

Authorisation Number: 1012556104051

Ruling

Subject: Provision of accommodation

Question 1

Will the provision of accommodation to Employee 1 be an exempt benefit under subsection 47(5) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) for the period from 1 April 2012 to 30 June 2014?

Answer

No. However, the provision of accommodation will be an exempt benefit under subsection 47(5) for the period from 1 April 2012 to the date the employment arrangement was renewed.

Question 2

Will the provision of accommodation to Employee 2 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

Answer

Yes.

Question 3

Will the provision of accommodation to Employee 3 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

Answer

No

Question 4

Will the provision of accommodation to Employee 4 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

Answer

No. However, the provision of accommodation will be an exempt benefit under subsection 47(5) for the period from when he first resided at the purchased property to 30 June 2014.

Question 5

Will the provision of accommodation to Employee 5 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

Answer

No.

Question 6

Will the provision of accommodation to Employee 6 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

Answer

No.

This ruling applies for the following period

1 April 2012 - 31 March 2013

1 April 2013 - 31 March 2014

1 April 2014 - 30 June 2014.

The scheme commenced on

1 January 1996.

Relevant facts and circumstances

You provide accommodation to a number of employees who hold positions that require them to reside on your premises.

The employees can only reside in the provided accommodation while they occupy the relevant position. At the conclusion of the employee's employment, the employee must vacate the accommodation.

The details of the employees are summarised below:

• Employee 1:

• initially entered into a X year fixed term employment agreement with you several years ago;

• the last renewal of the employment agreement occurred over 12 months ago;

• commenced occupying the accommodation on your premises several years ago;

• owns a property;

• lived in the property prior to moving into the accommodation that you provide;

• has rented out the property since moving into the accommodation that you provide;

• since renting out the property he/she has not stayed at the property and does not store any personal effects at the property; and

• has indicated that he/she intends to resume residing at the property at the conclusion of his/her employment with you.

• Employee 2:

• entered into an ongoing employment agreement with you several years ago;

• commenced occupying the accommodation on your premises several years ago;

• owns a property;

• lived in the property prior to accepting an appointment with you;

• he/she returns to the property regularly;

• has stored personal effects at the property; and

• has indicated that he/she intends to resume residing at the property at the conclusion of his/her employment with you.

• Employee 3:

• entered into a fixed term employment agreement with you several years ago;

• the last renewal of the employment agreement occurred over 12 months ago;

• commenced occupying the accommodation on your premises several years ago;

• did not own a residence at the time she/he occupied your accommodation;

• purchased a property over12 months ago;

• is renovating the property;

• has not lived in the property;

• has stored personal effects or furniture at the property;

• has adopted your address for her/his mail, driver's licence and electoral enrolment address; and

• has indicated that she/he intends to reside at the property at the conclusion of her/his employment with you.

• Employee 4:

• entered into an ongoing employment agreement with you several years ago;

• commenced occupying your accommodation several years ago;

• purchased a property over 12 months ago;

• stays at the property during term breaks;

• has stored personal effects and furniture at his/her property;

• has indicated that he/she intends to reside at the property at the conclusion of his/her employment with you; and

• has adopted your address for his/her mail, driver's licence and electoral enrolment address.

• Employee 5:

• entered into a fixed term employment agreement with you several years ago;

• the last renewal of the employment agreement occurred several months ago;

• commenced occupying your accommodation several years ago;

• has all of his/her personal effects and furniture in the accommodation you have provided; and

• is required to vacate the accommodation that you provide when his/her tenure is terminated.

• Employee 6:

• entered into a permanent ongoing employment agreement with you several years ago;

• commenced occupying your accommodation several years ago;

• prior to commencing his/her employment with you he/she resided in accommodation provided by his/her previous employer;

• purchased the property over 12 months ago;

• has rented out the property;

• has never lived at the property;

• does not have access to the property;

• has not stored any personal effects at the property;

• has indicated he/she intends to reside at the property when his/her tenure is terminated; and

• has adopted your address for his/her mail, driver's licence and electoral enrolment address.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act section 25

Fringe Benefits Tax Assessment Act section 31C

Fringe Benefits Tax Assessment Act section 31D

Fringe Benefits Tax Assessment Act section 31E

Fringe Benefits Tax Assessment Act paragraph 31F(1)(a)

Fringe Benefits Tax Assessment Act subsection 47(5)

Fringe Benefits Tax Assessment Act subsection 136(1)

Tax Laws Amendment (2012 Measures No. 4) Act 2012 section 27

Tax Laws Amendment (2012 Measures No. 4) Act 2012 section 28

Income Tax Assessment Act 1936 section 51A.

Reasons for decision

Will the provision of accommodation to the employees be an exempt benefit under subsection 47(5) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

In general terms, subsection 47(5) of the FBTAA provides that the provision of accommodation to an employee will be an exempt benefit where the employee is required to live away from his or her normal place of residence in order to perform their employment duties.

Subsection 47(5) was amended by Tax Laws Amendment (2012 Measures No. 4) Act 2012, (TLA Measures No. 4 Act 2012) which reformed the taxation treatment of living-away-from-home allowances and benefits. The amendments to subsection 47(5) apply from 1 October 2012.

Prior to the amendments subsection 47(5) stated:

(5) Where:

(a) a residual benefit consisting of the subsistence, during a year of tax, of a lease or licence in respect of a unit of accommodation is provided to an employee of an employer in respect of his or her employment;

(b) the unit of accommodation is for the accommodation of eligible family members and is provided solely by reason that the employee is required to live away from his or her usual place of residence in order to perform the duties of that employment;

(c) the accommodation is not provided while the employee is undertaking travel in the course of performing the duties of that employment; and

(d) either of the following conditions is satisfied:

(i) subsection (7) applies in relation to the provision of transport for the employee in connection with travel in the period in the year of tax when the lease or license subsisted, being travel between the employee's usual place of residence and the employee's usual place of employment;

(i) the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out:

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

(B) the place at which the employee actually resided while living away from his or her usual place of residence;

the benefit is an exempt benefit in relation to the year of tax.

The amendments amended paragraphs (b) and (d) and inserted paragraph (baa). Following the amendments paragraphs (b), (ba) and (d) state:

(b) the unit of accommodation is for the accommodation of eligible family members and is provided solely by reason that the employee is required to live away from his or her normal residence; and

(ba) the employee satisfies:

(i) sections 31C (about maintaining an Australian home) and 31D (about the first 12 months); or

(ii) section 31E (about fly-in fly-out and drive-in drive out requirements); and

(d) any of the following conditions is satisfied:

(i) subsection (7) applies in relation to the provision of transport for the employee in connection with travel in the period in the year of tax when the lease or license subsisted, being travel between the employee's usual place of residence and the employee's usual place of employment;

(ii) if the employee satisfies section 31C and 31D - the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out the matters in subparagraphs 31F(1)(a)(i) to (iii);

(iii) if the employee satisfies section 31E - the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out the matters in subparagraphs 31F(1)(b)(i) to (iii):

Therefore, to determine if the provision of the accommodation is an exempt benefit it is necessary to consider the following conditions:

A. Is the benefit a residual benefit?

B. Is the accommodation provided solely because the employee is required to live away from his or her (usual place of residence prior to 1 October 2012) normal place of residence?

C. For periods from 1 October 2012 are the requirements of paragraph (ba) met?

D. Is the employee travelling while performing their employment duties?

E. Has the employee provided the relevant declaration?

A. Is the benefit a residual benefit?

In general terms, a benefit will be a residual benefit if it is not a benefit under Divisions 2 to 11 of the FBTAA. For the purposes of this ruling, the relevant Division to consider is Division 6 which deals with housing benefits.

Section 25 of the FBTAA sets out the circumstances in which a housing benefit will be provided. It states:

The subsistence during the whole or a part of a year of tax of a housing right granted by a person (in this section referred to as the "provider") to another person (in this section referred to as the "recipient") shall be taken to constitute a benefit provided by the provider to the recipient in respect of the year of tax.

'Housing right' is defined under subsection 136(1) of the FBTAA to mean:

a lease or licence granted to the person to occupy or use a unit of accommodation insofar as that lease or licence subsists at a time when the unit of accommodation is the person's usual place of residence.

Therefore a housing benefit will be provided where the accommodation is the employee's usual place of residence. Where the accommodation is not the employee's usual place of residence the benefit will be a residual benefit.

B. Has the accommodation been provided to the employee as they are required to live away from their usual (or normal) place of residence?

The FBTAA does not define 'usual place of residence'. However, in subsection 136(1) it does define a 'place of residence' to mean:

(a) a place at which the person resides; or

(b) a place at which the person has sleeping accommodation;

whether on a permanent or temporary basis and whether or not on a shared basis.

As each of the employees reside and have sleeping accommodation in the provided accommodation, the provided accommodation is a place of residence.

'Normal residence' is defined in subsection 136(1) of the FBTAA to mean:

(a) if the employee's usual place of residence is in Australia - the employee's usual place of residence; or

(b) otherwise -

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

(ii) the place in Australia where the employee usually resides when in Australia.

As each of the employees is an Australian resident, their normal residence will be their usual place of residence. Therefore, in each instance it is necessary to consider the following questions:

(i) Does the employee have another residence (other than the residence that you provide)?

(ii) If the employee has another residence, is the other residence his or her usual place of residence?

If both of these conditions are met it is accepted that the second requirement of subsection 47(5) will be met as the duties of employment require the employees to live in the accommodation that you provide.

(i) Does the employee have another residence (other than the residence that you provide)?

If the employee does not have another residence, subsection 47(5) will not be met as it is not possible to be living away from the usual or normal residence if there is no other residence.

Support for this conclusion is provided in in Miscellaneous Taxation Ruling MT 2021 Fringe benefits tax: response to questions by major rural organisation. This ruling contains several attachments that provide responses to a range of questions concerning the practical application of fringe benefits tax.

Attachment 2 provides the questions and answers that relate to the provision of accommodation. Questions 4 and 5 of this attachment are relevant to the situation being considered and state:

QUESTION 4

If residential accommodation is provided by an employer to a permanently itinerant employee who has no other place of residence, will the benefit be subject to FBT?

ANSWER

Yes.

QUESTION 5

Where an employee has a residence other than that provided by the employer but it is not a usual place of residence by reason that the employee is permanently engaged in itinerant work, is the accommodation provided exempt under sub-section 47(5)?

ANSWER

The residence owned by the employee would be the employee's usual place of residence if he or she normally returns to that residence at the conclusion of casual jobs or seasons. If, however, the residence owned by the employee is not his or her usual place of residence, e.g., if permanently let to tenants, the exemption would not apply.

Further support for the existence of a requirement for the employee to have another 'place of residence' is provided by paragraph 14 of Miscellaneous Taxation Ruling MT 2030 Fringe benefits tax: living-away-from-home allowance benefits (MT 2030) which states:

As the decisions illustrate, 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. This would be relevant even if the employee is living in temporary quarters close to a temporary job site.

The most recent case to consider the application of the living-away-from-home allowance provisions was Re Compass Group (Vic) Pty Ltd As Trustee for White Roche and Associates Hybrid Trust and Federal Commissioner of Taxation [2008] AATA 845; 71 ATR 720; 2008 ATC 10-051 (Compass) which summarised a number of cases including:

• Case 4 (1952) 3 CTBR (NS) 21 (Case 4);

• Case C77 71 ATC 342 (Case C77);

• Case R99 84 ATC 650 (Case R99); and

• Case U110 87 ATC 663 (Case U110).

In the decision for each of these cases the Tribunal made comments that support the existence of a requirement to establish the existence of a 'place of residence' before the residence can be considered to be the 'usual place of residence'.

In Case 4 Member Cotes said at 27:

…[I]t is obvious that, to qualify for deduction under this section, the taxpayer must live at a place other than what should be regarded as his usual place of abode, …

In Case C77 the taxpayer was a technician employed at the head office of his employer at Sydney where he lived in a rented flat with his wife and mother. He was appointed to the employer's Canberra branch around November 1967.

On moving to Canberra the taxpayer initially stayed in a hotel before moving into a rented flat. At that point the flat they had been renting in Sydney was vacated, his wife joined him in Canberra and his mother went to live in a room he had agreed to rent from his brother-in-law. His furniture was also removed to this address at the same time.

The taxpayer continued in the employment with his employer in Canberra until January 1969, when he was advised that the branch was being closed, and he was to go back to Sydney. This did not suit him and after a period he took employment with another firm in Canberra for a period of three months, ultimately returning to Sydney in July 1969.

Whilst working in Canberra, the taxpayer and his wife paid regular visits to Sydney where they stayed with the brother-in-law which was where the mother resided and their furniture was housed.

In considering whether the allowance that was being paid to the taxpayer could be described as being a living-away-from-home allowance Member Dempsey at ATC 344 said:

On the facts of this case the amount in question cannot be described as a living away from home allowance. (The) Taxpayer, whilst being paid the allowance, had no other home other than the flat he was renting in Canberra and where he resided with his wife. This place must be regarded as his usual place of abode for the period that he lived there. Support for his view is contained in the submissions made by the representative of the Commissioner where he referred the Board to the decisions in the case of R v. Hammond (1852) 17 Q B 772 p. 781 where Lord Campbell C.J. at p. 781 said. ``A man's residence where he lives with his family and sleeps at night is always his place of abode in the full sense of this expression''

15. Further my late colleague Mr. McCaffrey, in 8 C.I.B.R. (N.S.) Case 130 734 at p. 737 said "Ordinarily, a place of abode and a place of residence mean the same thing (R. v. Braithwaite 1918 2 K.B. at p.330 (C.A.)) and `usual' means `usual in normal circumstances' Brailey v. Brailey (1922) P.15 at p.26."

16. I think the evidence in this case clearly establishes that taxpayer gave up his place of residence in Sydney and took up a new place of abode in Canberra and that if it had not been for the winding up of the Branch he would have remained there indefinitely. In fact, he did reside there in the rented flat for about eighteen months accompanied by his wife, so for this period they had no other place of abode.

Similarly, in Case R99 Member Roach at ATC 657 said:

Everyone has a place of abode. If a person has only one place of abode then that place is his ``usual place of abode''. Some persons have more than one place of abode in which case the question can be asked, which of those places of abode is his or her ``usual place of abode''.

Finally, in Case U110 Senior Member McMahon said at ATC 666:

An applicant must first establish that a place of abode existed in fact before he begins to prove that it is his usual place of abode.

After summarising these decisions, Deputy President Forgie in Compass said at paragraph 55:

As Mr Cotes alluded to in CaseB47, it necessarily assumes that the taxpayer has two places that could be described as his or her place of residence before one or the other needs to be identified as the "usual place of residence".

Some support is also provided by the decision of the Federal Court in Roads and Traffic Authority of New South Wales v Federal Commissioner of Taxation 26 ATR 76; (1993) 116 ALR 482; (1993) 43 FCR 223 in which Hill J in considering whether the employees would be able to claim an income tax deduction for expenses incurred in relation to a camping allowance distinguished between the situation of an allowance paid to an employee who had a permanent house in which he or she lived when not in camp from the situation of an employee who had no private home and was employed indefinitely to work at a particular site.

Therefore, for the exemption in subsection 47(5) of the FBTAA to apply to the accommodation provided to the employees, it is necessary for the employees during the relevant period to have an alternative 'place of residence' which can be considered to be the 'usual place of residence'.

As set out above, a 'place of residence' is a place at which the person resides or a place at which the person has sleeping accommodation, whether on a permanent or temporary basis and whether or not on a shared basis.

Both MT 2030 and the various cases make it clear that a property can continue to be a 'place of residence' even though the employee is sleeping at another residence.

For example, the general rule in paragraph 14 of MT 2030 states:

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.

Further, paragraph 20 states:

Employees who move to a new locality to take up a position of limited duration with an intention to return to the old locality at the end of the appointment would generally be treated as living away from their usual place of residence.

However, while these paragraphs provide support for accepting the contention that a property at which the employee has had sleeping accommodation can continue to be a 'place of residence', even if the employee has changed the place at which he or she has sleeping accommodation, it will not continue for an indefinite period. Both paragraphs 14 and 20 of MT 2030 contain a requirement for there to be an intention or expectation of the employee returning to live at the former place of residence.

(i) If the employee has another residence, is the other residence his or her usual place of residence?

In the absence of a legislative reference it is relevant to refer to the ordinary meaning of 'usual'. The Macquarie Dictionary defines 'usual' to mean:

1. habitual or customary: his usual skill.
2. such as is commonly met with or observed in experience; ordinary: the usual January weather.
3. in common use; common: say the usual things.

noun

4. that which is usual or habitual.

phrase

5. as usual, as is (or was) usual; in the customary or ordinary manner: he will come as usual.

Paragraph 12 of MT 2030 summarises the 'place of residence' definition as follows:

A place of residence of a person is thus the place where he or she resides or has some form of sleeping accommodation. The customary meaning of the word "reside" is to dwell permanently or for a considerable time, or have one's abode for a time. In turn "residence" means the place, especially the house, in which one resides; a dwelling place; or a dwelling.

Paragraphs 15 to 18 refer to various decision of Taxation Boards of Review relating to the former 51A of the Income Tax Assessment Act 1936 (ITAA 1936). In referring to these decisions paragraph 14 of MT 2030 states:

As the decisions illustrate, 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. This would be relevant even if the employee is living in temporary quarters close to a temporary job site.

Further discussion occurs at paragraphs 19 to 25. Paragraph 20 provides the following general rule:

Employees who move to a new locality to take up a position of limited duration with an intention to return to the old locality at the end of the appointment would generally be treated as living away from their usual place of residence. For example, a construction worker having to travel to a construction site to live and work would be in this category unless he had abandoned the former place of residence upon moving to the locality of the site. A case of the latter situation would be where the employee decided to permanently leave the former home, e.g., if a resident of Sydney, on obtaining a job for two years on a construction site in a remote part of Western Australia, decided to "sell up" in Sydney and move permanently to Western Australia to live.

As an example of the application of this general rule paragraph 22 states:

Examples of employees on appointments of finite duration who will generally be living away from their usual place of residence are foreign nationals employed in Australia on a temporary basis and Australian residents (e.g., export consultants, diplomats, immigration officials, etc.) stationed in a foreign country for a time. Provided the appointment is for a limited period and the employee can be expected in the normal course to return to the same city or district of the home country to live, the employee may be treated as living away from his or her usual place of residence.

These principles and the various cases that have considered usual place of abode or usual place of residence were discussed by the Administrative Appeals Tribunal in Compass Group (Vic) Pty Ltd (as trustee for White Roche & Associates Hybrid Trust) v FC of T [2008] AATA 845; 2008 ATC 10-051. At paragraphs 55 and 56 Deputy President S A Forgie said:

55. There are several principles that can be gleaned from these cases. The first is that the fact that s 30 and, before it, s 51A, are concerned with what is described as a living-away-from-home allowance. That allowance is paid by an employer to an employee in respect of the employee's employment. It is a payment in the nature of compensation. The compensation is to meet additional expenses the employee incurs during a particular period and for other additional disadvantages he or she faces in that period but only if the expenses are incurred because he or she is required to live away from his or her usual place of residence in order to perform the duties of employment. As Mr Cotes alluded to in CaseB47, it necessarily assumes that the taxpayer has two places that could be described as his or her place of residence before one or the other needs to be identified as the "usual place of residence".

56. Putting to one side the case of Case 50, all cases looked to the taxpayer's place of residence before he or she acquired another place of residence. Each looked to the taxpayer's continuing connection with the first place of residence including matters such as whether his or her family continued to live there, the frequency of the taxpayer's visits there and whether or not that was a place to which the taxpayer could return at will if he or she so wished. Also relevant was the nature of the employment and whether the move to another place was a temporary or permanent move.

C. For periods from 1 October 2012 are the requirements of paragraph (ba) met?

In general terms, paragraph 47(5)(ba) of the FBTAA requires the employee to satisfy either:

• sections 31C (about maintaining an Australian home) and 31D (about the first 12 months); or

• section 31E (about fly-in fly-out and drive-in drive-out requirements).

For the purposes of this ruling the relevant sections are 31C and 31D as the employees are not fly-in fly-out and drive-in drive-out employees.

However, the application of these sections for the period from 1 October 2012 to 30 June 2014 is subject to the transitional provisions contained in TLA Measures No. 4 Act.

Subsection 27(1) of TLA Measures No. 4 Act states:

27 Transitional-existing employment arrangements

(i) During the transitional period, disregard paragraph 31C(a) and section 31D of the Fringe Benefits Tax Assessment Act 1986 if:

(a) the employee is neither a temporary resident nor a foreign resident; and

(b) during the entire period:

(i) starting at the Budget time; and

(ii) ending on 30 September 2012;

that employment was covered by an eligible employment arrangement that was neither varied in a material way nor renewed.

Subsection 27(3) of TLA Measures No. 4 Act defines the 'transitional period' as:

(a) starting on 1 October 2012; and

(b) ending at the earliest of:

(i) 30 June 2014; and

(ii) the time the eligible employment arrangement referred to in paragraph (1)(b) or (2)(b); and

(iii) the first time that eligible employment arrangement is varied in a material way or renewed.

Where the transitional period ceases prior to 30 June 2014, section 28 of TLA Measures No. 4 Act defines the relevant 12 month period for the purposes of section 31C. Section 28 of TLA Measures No. 4 Act states:

28 Transitional - first 12 months for existing arrangements

(1) This item applies if, on 1 October 2012:

(a) an employee's duties of employment require the employee to live away from the place in Australia where he or she usually resides when in Australia; or

(b) the employee expects that his or her duties of employment will require him or her to resume living away from the place in Australia where he or she usually resides when in Australia.

(2) Treat the 12 month period referred to in subsection 31D(1) of the Fringe Benefits Tax Assessment Act 1986 as if it were the first 12 months on or after 1 October 2012 that the employee lives away from that place as so required

In summarising, if the employment of the employee was covered by an eligible employment arrangement that was neither varied in a material way, nor renewed between 8 May 2012 and 30 September 2012 the transitional provisions allow section 31C and 31D of the FBTAA to be disregarded during the period from 1 October 2012 to the earliest of

• 30 June 2014, or

• the first time the eligible employment arrangement is varied in a material way or renewed after 30 September 2012.

D. Is the employee travelling while performing their employment duties?

This requirement will be met for all of the employees as none of the employees are travelling while performing their employment duties.

E. Has the employee provided the relevant declaration?

Prior to 1 October 2012, subparagraph 47)5)(d)(ii) of the FBTAA required the employee to give the employer before the declaration date a declaration purporting to set out:

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

(B) the place at which the employee actually resided while living away from his or her usual place of residence

Since 1 October 2012, subparagraph 47(5)(d)(ii) of the FBTAA required the employee to give the employer before the declaration date a declaration purporting to set out the matters in subparagraphs 31F(1)(a)(i) to (iii).

For the purposes of this Ruling it is assumed the relevant declaration will be provided.

1. Will the provision of accommodation to Employee 1 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

A. Is the benefit a residual benefit?

As discussed above, in determining whether the benefit is a residual benefit it is necessary to initially consider whether the accommodation that you provide is the employee's usual place of residence.

(i) During the relevant years did the employee have another residence?

The employee owns a property in which he/she resided before moving into the accommodation that you provide. As he/she has retained this property, the employee had another residence during the relevant years.

(ii) Is the property that is owned the usual place of residence?

In considering the factors discussed above in relation to the property owned by the employee, the following factors indicate the property remains the usual place of residence:

• he/she resided at the property prior to being required to reside in your accommodation;

• there are no factors to indicate the employee would have ceased residing at the property if he/she had not been required to reside in your accommodation;

• his/her employment contract is for a set period; and

• he/she has expressed an intention to return to live in this property after his/her tenure with you has ceased.

Although, the employee has resided away from the property for several years which can indicate the property has ceased to be the usual place of residence it is accepted on the basis of the factors listed above that the employee has maintained a sufficient connection with the owned property for it to be considered to be the usual place of residence.

Therefore, as the owned property is the usual place of residence, the provision of accommodation will be a residual benefit.

B. Has the accommodation been provided to the employee as they are required to live away from their usual place of residence?

As the employee's duties require the employee to reside in your accommodation it is accepted that the employee is required to live away from the usual place of residence.

C. For the periods from 1 October 2012 are the requirements of paragraph (ba) met?

As discussed above, the application of paragraph (ba) depends upon whether the transitional provisions apply. If the transitional provisions apply, paragraph 31C(a) and section 31D can be disregarded.

The application of the transitional provisions depends upon whether there was an eligible employment arrangement.

In discussing eligible employment arrangements chapter 11 of Fringe benefits tax: a guide for employers states:

Eligible employment arrangement

An eligible employment arrangement is the arrangement under which the employer or an associate of the employer commits to provide a particular employee with an allowance or benefit for the employee's accommodation, food or drink. This is as a result of the employee's duties of employment requiring the employee to live away from his or her normal residence.

Depending on the circumstances, an eligible employment arrangement could be the contract of employment, award, enterprise agreement, or any additional arrangements involving the employer and employee.

A general agreement covering all employees, such as an award or enterprise agreement, which provides for the payment of an allowance or benefit if an employee's employment duties require the employee to live away from his or her normal residence, is not an eligible employment arrangement.

Example

Peter is an Australian resident who commenced employment in his employer's Melbourne branch prior to 8 May 2012.

Peter's employment arrangement is governed by an enterprise agreement entered into before 8 May 2012. The enterprise agreement provides for the payment of a LAFHA to employees who are required to live away from their normal residence to perform their duties of employment.

Peter's normal residence is in Melbourne.

In January 2013, Peter and his employer agreed for him to commence an 18-month secondment in the Sydney branch from 1 February 2013. As part of the agreement, the employer advised Peter that he will be paid a LAFHA during the secondment period, in accordance with the terms of the enterprise agreement.

The eligible employment arrangement in this example is the subsequent agreement under which the employer committed to pay Peter a LAFHA during the 18-month secondment period - it is not the enterprise agreement. As the eligible employment arrangement was not in place before 7.30pm (AEST) on 8 May 2012, the transitional rules will not apply to the LAFHA paid to Peter.

In applying this discussion, the facts as provided indicate you entered into an eligible employment arrangement with the employee for the provision of accommodation several years ago. The facts also indicate that an eligible employment arrangement was in place on 8 May 2012. This arrangement continued through to when the employment arrangement was renewed.

Therefore, as an eligible employment arrangement was in place as at 8 May 2012, the transitional arrangements will apply from 1 October 2012 until the arrangement was renewed. Consequently, paragraph 31C(a) and section 31D can be disregarded for the period ending when the arrangement was renewed.

Were the requirements of paragraph (ba) met for the period from 1 October 2012 to when the arrangement was renewed?

During this period paragraph (ba) will be met if it is reasonable to expect that the employee will resume living at the property that he/she owns when the requirement to live in your accommodation ceases. As this requirement is met, the requirement of paragraph (ba) will be met for the period 1 October 2012 to the date the arrangement was renewed.

Are the requirements of paragraph (ba) met for the period from when the arrangement was renewed to 30 June 2014?

As the transitional arrangements do not apply to this period, it is necessary for the requirements of both sections 31C and 31D to be met.

Section 31C states:

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.

Subsection 31D(1) states:

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.

In considering these requirements;

• subparagraph 31C(a)(ii) is not met as the property that is owned is rented out and is not available for the employee's immediate use and enjoyment; and

• subsection 31D(1) will not be met as it is not the first 12 months in which the accommodation will be provided to the employee.

Therefore, the requirements of paragraph (ba) will not be met for the period from the date the arrangement was renewed to 30 June 2014.

D. Is the employee travelling while performing their employment duties?

As discussed above, this requirement is met.

E. Have the relevant declarations been provided?

This requirement will be met if the relevant declarations are provided.

Conclusion regarding the accommodation provided to employee 1

The accommodation provided to Employee 1 will be an exempt benefit under subsection 47(5) for the period from 1 April 2012 to when the employment arrangement was renewed.

The accommodation will cease to be an exempt benefit after the arrangement was renewed as the requirements of paragraph (ba) will not be met.

2. Will the provision of accommodation to Employee 2 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

A. Is the benefit a residual benefit?

As discussed above, in determining whether the benefit is a residual benefit it is necessary to initially consider whether the accommodation that you provide is the employee's usual place of residence.

(i) During the relevant years did the employee have another residence?

The employee owns a property in which he resided before moving into the accommodation that you provide. As he has retained this property, the employee had another residence during the relevant years.

(ii) Is the property that is owned the usual place of residence?

In considering the factors discussed above in relation to the property owned by the employee, the following factors indicate the property remains the usual place of residence:

• he resided at the property prior to being required to reside in your accommodation;

• he returns to the property regularly;

• there are no factors to indicate the employee would have ceased residing at the property if he had not been required to reside in your accommodation; and

• he has expressed an intention to return to live in this property after his tenure with you has ceased.

On the basis of these factors it is accepted the employee has maintained a sufficient connection with the owned property for it to be considered to be the usual place of residence.

Therefore, as the owned property is the usual place of residence, the provision of accommodation will be a residual benefit.

B. Has the accommodation been provided to the employee as they are required to live away from their usual place of residence?

As the employee's duties require the employee to reside in your accommodation it is accepted that the employee is required to live away from the usual place of residence.

C. For the periods from 1 October 2012 are the requirements of paragraph (ba) met?

As discussed above, the application of paragraph (ba) depends upon whether the transitional provisions apply. If the transitional provisions apply, paragraph 31C(a) and section 31D can be disregarded.

The application of the transitional provisions depends upon whether there was an eligible employment arrangement.

The facts as provided indicate you entered into an eligible employment arrangement with the employee for the provision of accommodation several years ago. The facts also indicate that an eligible employment arrangement was in place on 8 May 2012 and has not been altered or renewed.

Therefore, on the assumption that the arrangement will not be renewed or varied until after 30 June 2014, the transitional arrangements will apply from 1 October 2012 until 30 June 2014. Consequently, paragraph 31C(a) and section 31D can be disregarded for the period ending on 30 June 2014.

During this period paragraph (ba) will be met as it is reasonable to expect that the employee will resume living at the property that he/she owns when the requirement to live in your accommodation ceases.

Therefore, the requirements of paragraph (ba) are met.

D. Is the employee travelling while performing their employment duties?

As discussed above, this requirement is met.

E. Have the relevant declarations been provided?

This requirement will be met if the relevant declarations are provided.

Conclusion regarding the accommodation provided to employee 2

The accommodation provided to Employee 2 will be an exempt benefit under subsection 47(5) for the period from 1 April 2012 to 30 June 2014.

3. Will the provision of accommodation to Employee 3 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

A. Is the benefit a residual benefit?

As discussed above, in determining whether the benefit is a residual benefit it is necessary to initially consider whether the accommodation that you provide is the employee's usual place of residence.

(i) During the relevant years did the employee have another residence?

The facts as provided are that at the time the employee commenced to reside in your accommodation she did not own a residence. This indicates the previous residence was a rental property. Although not stated as a fact, it is assumed the employee has ceased to rent this property and does not intend to return to the property.

The facts as provided indicate the employee purchased a property over 12 months ago.

As discussed above, a 'place of residence' is a place at which the person resides or a place at which the person has sleeping accommodation, whether on a permanent or temporary basis and whether or not on a shared basis. The facts as provided are the employee does not have sleeping accommodation at the property. Therefore, for the property to be a place of residence, it must be a property at which the employee resides.

In Case R99 the taxpayer was an electrical mechanic employed in Sydney and living at home with his parents. Due to a lack of work in Sydney he was offered work in connection with the electrification of the railway line between Wyong and Newcastle. He accepted this and stayed with friends at Avoca which was where he owned a block of land on which he was constructing a residence. During the year in question he left most of his possessions at his parent's home in Sydney to which he returned on most weekends. In concluding that the taxpayer's usual place of abode during the period in question was his parents' home in Sydney, Chairman Stevens at ATC 653 distinguished the facts from those that existed in Case N31 81 ATC 167 and said:

13. In Case N31, 81 ATC 167 (a decision put forward as being similar) Board of Review No. 2 was considering the situation of a person who was employed in Perth and who, due to lack of projects there, was given the option by his employers of ``either being retrenched or being transferred temporarily to Sydney to work which the company had afoot in that city''. No firm commitment of a transfer back to Perth was given whilst the ``employee mentioned six months as the likely period that he would be required to work in Sydney'' - actually close to 17 months before ``he completed his assignment and returned to Perth''. At the time of his transfer he was renting a house in Perth ``on a shared basis with two other young men'' and on his transfer he ``left there in situ in the care of another lodger, a bed, a wardrobe and some other personal possessions'' - he made no contribution to the rent of this house whilst in Sydney. After examining the facts and previous cases … the Board concluded that they considered ``that the taxpayer's degree of connection with the Perth house was so tenuous as to involve stretching the English language to unpardonable limits to call it his abode at all''.

14. Here the taxpayer's degree of connection with (and resort to) his parents' home is far less tenuous and, like Mr. Cote's in Case B47 at p. 206, I ``have formed the opinion that the home at (Sydney) was the more permanent place of abode and should be regarded in all the circumstances as his `usual' place of abode''.

Member Roach at ATC 657 said:

12. In this reference I am satisfied that until his departure for the town of X, the taxpayer had as his place of abode, and usual place of abode, the home of his parents. I am also satisfied that his ``usual place of abode'' came to be his newly constructed residence in X from the time he occupied it, but not at any earlier date. Prior to occupation it was merely a proposed future place of abode and no more.

In Case X41 90 ATC 347; 21 ATR 3337 (Case X41) the taxpayer was an accountant who from the end of 1977 lived outside the Perth metropolitan area in various locations except for the period from January 1985 to February 1986 when he resided in rented accommodation in Perth. The taxpayer was married and his wife accompanied him to each location. They returned to Perth for their holidays to see their children and members of their family and when in Perth generally stayed with members of their family. In February the taxpayer was offered an assignment at the Karratha office where he remained until October 1989.

While in Karratha the taxpayer received a location allowance. In 1988 the taxpayer bought a home unit in Perth which was rented. Before the Tribunal the taxpayer gave evidence that at least up until towards the end of 1988 he had regarded Perth as being his place of residence. In considering whether the allowance was a living-away-from-home allowance Deputy President McDonald at ATC 351 said:

Even if I am wrong in the above then in my view the applicant cannot claim Perth as his ``usual place of residence''. There is a distinction to be drawn between a person's ``point of origin'' as identified in his letter of assignment and a place where a person has his ``usual place of residence''. Probably Perth may be the place to which the applicant habitually returns for his holidays and for purposes of seeing his children, relations and friends. That however does not necessarily make Perth his ``usual place or residence''. Nor does the fact that he regards Perth as his ``usual place of residence'' make it so. That also must be judged objectively in accordance with the well-known principles set out by Lord Campbell C.J. in R. v. Hammond (1852) 17 Q.B. 772 at p. 781 where his Lordship said:

"A man's residence where he lives with his family and sleeps at night, is his place of abode in the full sense of that expression.''

The places where the applicant has lived and worked since 1978 are outlined above. They show that the applicant spent only from January 1985 to February 1986 living in Perth during that period of time. He no doubt can be considered to be resident in Perth for the period January 1985 to February 1986. Outside the period January 1985 to February 1986 the applicant did not maintain any particular connection to Perth other than he left some furniture which was distributed to those of his children who live in Perth. The furniture has remained with them ever since. The fact that he remained in Perth from January 1985 to February 1986 does not qualify him to be considered as a resident of Perth for the entire period. Rather it seems to me on the facts of this case that the applicant's usual place of residence is equated to where he works at any particular time rather to any fixed location. In any event the memo signed by the applicant and dated 2 June 1988 (ex. 2) (i.e. at the commencement of the tax year in question) evidences a strong attachment which the applicant had to remaining in Karratha. Whilst this may not be absolute (i.e. depending on his obtaining employment) it establishes Karratha as his preferred location for residence and tends to negate an implication of attachment to Perth which may otherwise arise as the result of his purchasing a home unit in Perth. The purchase of the home unit does not per se make Perth his place of residence. This is particularly so in a case where he has not ever resided in that home unit.

The decision in Case X41 was applied in Case Y40 91 ATC 393; 22 ATR 3351 (Case Y40) where the taxpayer was an engineer who was temporarily transferred by his employer from Perth to Karratha. While in Karratha he rented out his home in Perth.

Deputy President Gerber at ATC 396 said:

10. I accept T's evidence that when, in the relevant period, he took on an assignment from his employer to work in Karratha, he did not move to that town with any intention of residing there permanently. I furthermore accept that he regarded Perth as his permanent place of abode - to borrow a concept from the conflict of laws, I am satisfied that one would regard him throughout the relevant period as ``domiciled'' in Perth - T's involvement in the Woodside North-West Gas project was of a temporary nature and his permanent home, albeit leased for the duration, was in Perth, a town to which he and his family intended ultimately to return on the completion of the Karratha assignment. None of the above finding, however, can in any way derogate from the conclusion of law that when he agreed to work in Karratha, having let his home in Thornlie to take up residence there, he not only changed his place of work, but his place of residence. On this finding, T did not, during the relevant period live away from home, and his ``usual place of residence'' was Karratha. ….

11. On the whole of the evidence, I am satisfied that any finding other than that T was living in Karratha from August 1985 to April 1989 would be perverse. He was thus not ``living-away-from-home'' as the Act requires - he had no other home than in Karratha; the Perth home being leased. T's submission that he continued to pay the rates and interest on his mortgage on the Perth home are fiscally irrelevant (save that they are tax deductible since rent from property is income, …). In the circumstances, I see no need to have recourse to dictionary definitions of terms such as ``usual'' and "residence'' … I am satisfied that the statutory relief provided for by sec 23L(1) of the Income Tax Act is designed to deal with a situation where a man is compelled to live away from his home for purposes of his work and thus compelled to maintain his home whilst living in another. ``A man's residence, where he lives with his family and sleeps at night, is always his place of abode in the full sense of that expression''

The taxpayer in Case Y51 91 ATC 453; 22 ATR 3412 (Case Y51) also rented out his Perth home and relocated himself and his family to Karratha when he was required to work there. He continued to regard his Perth home as his normal home in the sense that it was the place to which he returned after undertaking employment assignments.

Deputy President Johnston decided that during the relevant period the taxpayer lived in Karratha and at ATC 456 said:

In the first place, as to whether A was throughout the tax period living away from his usual place of residence I accept the reasoning set forth by Deputy President Gerber in paragraphs 10 and 11 of his reasons in Case Y40, at p. 396. Even though the applicant, notwithstanding that he had let his home at 3 Teague Street, Victoria Park, continued to regard it as his normal home (in the sense of the place to which he always returned after undertaking employment/assignments elsewhere), the simple fact of the matter is, viewed objectively, during the tax year in question he was actually residing at the Assignment Location in Karratha. That was where for everyday purposes he lived and where he maintained his home for the duration of the assignment period. That was where his wife and children resided and from where they conducted their day to day activities including attending school. Looked at in terms of the period specifically in issue, the Tribunal finds that in that period his "usual place of residence'' was in Karratha.

In Case U110 the taxpayer had declared as income a weekly living allowance and claimed a deduction for the same amount under the former section 51A of the ITAA 1936. He had, at his employer's request taken up a temporary assignment to manage its troublesome projects in Sydney for a period of what was thought to be six to nine months. The employer provided a house for the taxpayer in Sydney and the taxpayer rented his Adelaide house in an unfurnished state. He moved some of his furniture and his young daughter to Sydney but maintained his contact with his friends in Adelaide and, on one occasion, visited there. During the last six months of his assignment, his Adelaide house was vacant and he did not move his furniture back into it. Ultimately, he took another job in Sydney and did not return to Adelaide.

Senior Member McMahon at ATC 666 said:

19. It seems to me that as a matter of fact the Adelaide home could not, during the year, be said to be the applicant's place of abode. For six of the 12 months it was occupied by another family with their furniture. At no time during that period could the applicant have knocked on the door and demanded that he be allowed to sleep there with his family. He had granted the right of exclusive possession to others. More importantly, he did not, as a matter of fact sleep there. For the remainder of the period it was empty of both tenants and furniture. Without fanciful hardships, it would not have been possible to stay there during this time - the remainder of the financial year. More importantly, again, the applicant did not in fact do so. A place of abode is more than a place one merely owns. It is a place where one lives. Since 1576, the Shorter Oxford English Dictionary says, abode has meant habitual residence. In that sense, the word "usual" in the statutory phrase is probably unnecessary. After the applicant left the Adelaide house, it ceased to be either his usual or any other adjectival place of abode. An applicant must first establish that a place of abode existed in fact before he begins to prove that it is his usual place of abode.

20. The purpose of the legislation, it has been said, is to compensate a person for being obliged to keep up two homes because of his employment. Here the applicant simply turned his former home into a revenue-earning asset, against which he claimed and was allowed appropriate deductions. He was not put to the expense of a dual establishment.

21. There have been two decisions of Boards of Review dealing with this section which were decided in the taxpayer's favour, namely Case C55, 71 ATC 242 and Case R99, 84 ATC 650. In the former case, the taxpayer's family continued to live in the main place of abode (or "home" as the Board referred to it) while the taxpayer, a miner, lived in sparse conditions near his place of work. He came home to his family every second weekend. In the latter case, an electrical mechanic, forced to find employment on the Central Coast, stayed with friends while working in the area. Having left most of his belongings at the home of his parents, where he lived before taking up this employment, he would return there each weekend. It will be seen that such were the ties with the places of abode where the taxpayers' families lived, that they could also be said to be the taxpayers' usual places of abode. The taxpayers usually lived and slept in the places of abode at regular intervals. This cannot be said of the present applicant.

These cases illustrate that, while a person may have another place to which they intend to live in at the end of their employment duties, the 'intention' is not enough to make the property their 'usual place of residence'. Neither does the fact that Employee 3 is renovating the property as this is similar to Case R99 where the taxpayer was building a home. Member Roach stated at ATC 657 that '…Prior to occupation it was merely a proposed future place of abode and no more.'

Therefore, the facts as provided indicate the property which has been purchased has not become a place of residence. As the employee does not have another residence, the accommodation that you provide is the employee's usual place of residence and the benefit will not be a residual benefit.

3. Will the provision of accommodation to Employee 4 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

A. Is the benefit a residual benefit?

As discussed above, in determining whether the benefit is a residual benefit it is necessary to initially consider whether the accommodation that you provide is the employee's usual place of residence.

(i) During the relevant years did the employee have another residence?

The facts as provided indicate the employee purchased a property over 12 months ago, but do not indicate whether the employee had another residence prior to this time.

In the absence of any information, it has been assumed the employee did not have another residence between 1 April 2012 and the date that they purchased the property. On the basis of this assumption, the accommodation provided during this period will not be a residual benefit as the employee did not have another residence that could be a usual place of residence.

The facts as provided indicate the employee has stayed at the property he purchased regularly and has stored personal effects and furniture at the property. As the employee has sleeping accommodation at the property and has stayed there, it is accepted that the property is a residence.

Further, it is accepted the employee has maintained a sufficient connection with the property for it to be considered to be the usual place of residence as:

• he regularly returns to the property;

• there are no factors to indicate the employee would not have resided at the property if he had not been required to reside in your accommodation; and

• he has expressed an intention to live in this property after his tenure with you has ceased;

Therefore, as the owned property is the usual place of residence, the provision of accommodation will be a residual benefit from the date the purchased property became the usual place of residence.

B. Has the accommodation been provided to the employee as they are required to live away from their usual place of residence?

As the employee's duties require the employee to reside in your accommodation it is accepted that the employee is required to live away from the usual place of residence.

C. For the periods from 1 October 2012 are the requirements of paragraph (ba) met?

As discussed above, the application of paragraph 47(5)(ba) depends upon whether the transitional provisions apply. If the transitional provisions apply, paragraph 31C(a) and section 31D can be disregarded.

The application of the transitional provisions depends upon whether there was an eligible employment arrangement.

The facts as provided indicate you entered into an eligible employment arrangement with the employee for the provision of accommodation several years ago. The facts also indicate that an eligible employment arrangement was in place on 8 May 2012 and has not been altered or renewed.

Therefore, on the assumption that the arrangement will not be renewed or varied until after 30 June 2014, the transitional arrangements will apply from 1 October 2012 until 30 June 2014. Consequently, paragraph 31C(a) and section 31D can be disregarded for the period ending on 30 June 2014.

During this period paragraph 47(5)(ba) will be met as it is reasonable to expect that the employee will resume living at the property that he owns when the requirement to live in your accommodation ceases.

Therefore, the requirements of paragraph 47(5)(ba) are met.

D. Is the employee travelling while performing their employment duties?

As discussed above, this requirement is met.

E. Have the relevant declarations been provided?

This requirement will be met if the relevant declarations are provided.

Conclusion regarding the accommodation provided to Employee 4

The accommodation provided to Employee 4 will be an exempt benefit under subsection 47(5) for the period from the date on which he first resided at the purchased property to 30 June 2014.

3. Will the provision of accommodation to Employee 5 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

A. Is the benefit a residual benefit?

As discussed above, in determining whether the benefit is a residual benefit it is necessary to initially consider whether the accommodation that you provide is the employee's usual place of residence.

(i) During the relevant years did the employee have another residence?

The facts as provided are that the employee did not have another residence during the relevant period. As the employee does not have another residence, the accommodation that you provide is the employee's usual place of residence and the benefit will not be a residual benefit.

Therefore, the accommodation provided to the employee will not be an exempt benefit under subsection 47(5).

3. Will the provision of accommodation to Employee 6 be an exempt benefit under subsection 47(5) of the FBTAA for the period from 1 April 2012 to 30 June 2014?

A. Is the benefit a residual benefit?

As discussed above, in determining whether the benefit is a residual benefit it is necessary to initially consider whether the accommodation that you provide is the employee's usual place of residence.

(i) During the relevant years did the employee have another residence?

The facts as provided are that at the time the employee commenced to reside in your accommodation he/she did not own a residence. Rather, he/she was residing in accommodation provided by his/her previous employer. Although not stated as a fact, it is assumed the employee will not return to this property as it was provided in relation to the employee's duties of employment with the previous employer.

The facts as provided indicate the employee purchased a property more than 12 months ago.

As discussed above, a 'place of residence' is a place at which the person resides or a place at which the person has sleeping accommodation, whether on a permanent or temporary basis and whether or not on a shared basis. The facts as provided are the employee does not have sleeping accommodation at the property. Therefore, for the property to be a place of residence, it must be a property at which the employee resides.

The cases discussed above in relation to employee 3 illustrate that, while a person may have another place to which they intend to live in at the end of their employment duties, the 'intention' is not enough to make the property their 'usual place of residence'. Rather, than being a place of residence, the facts indicate the property is nothing more than an investment property owned by the employee.

Therefore, the facts as provided indicate the property which has been purchased has not become a place of residence. As the employee does not have another residence, the accommodation that you provide is the employee's usual place of residence and the benefit will not be a residual benefit.

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