Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1013005439451

Date of advice: 2 May 2016

Ruling

Subject: School building fund

Question 1

Is the Building a 'building used, or to be used, as a school or college' for the purposes of item 2.1.10 of the table in subsection 30-25(1) of the Income Tax Assessment Act 1997?

Answer

No

This ruling applies for the following periods:

Year ending 30 June 2016

Year ending 30 June 2017

Year ending 30 June 2018

The scheme commences on:

1 July 2015.

Relevant facts and circumstances

Religious Institution (RI) operates a school building fund which is endorsed as a deductible gift recipient under section 30-120 of the Income Tax Assessment Act 1997.

RI wants to use its school building fund to pay for the cost of residential accommodation (the Building).

The Building is occupied by an employee of RI who provides instruction in a school run by RI, and undertakes other activities for RI.

Relevant legislative provisions

Section 30-25 of the Income Tax Assessment Act 1997

Reasons for decision

Item 2.1.10 of the table in subsection 30-25(1) of the Income Tax Assessment Act 1997 (ITAA 1997) describes a school building fund as:

Taxation Ruling TR 2013/2 Income Tax: school or college building funds sets out the Commissioner's view about school building funds, and provides the following on whether a building is 'used as a school or college':

The Building is not used to provide systematic instruction in a course of education, and will not be 'used as a school' unless its use is incidental to the provision of instruction in a school building.

The Building was constructed to enable RI to provide accommodation to its employees. The Building is intended to house RI staff.

The Building is currently housing an RI employee. The functions of the employee include providing instruction in the school, and other activities of RI.

A building that is used to provide residential accommodation for teachers at a school will generally be considered incidental to the provision of instruction in a school building.

The evidence shows the Building is provided to the RI employee in their capacity as an employee of RI.

Use of the Building is considered incidental to the provision of religious activities in religious buildings, and not incidental to the provision of instruction in a school building.

The Building is not a building 'used as a school or college' for the purposes of item 2.1.10 of the table in subsection 30-25(1) of the ITAA 1997. RI cannot pay for the construction cost of the Building using funds from its endorsed school building fund.


Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).