Edited version of your written advice

Authorisation Number: 1051490901828

Date of advice: 27 May 2019

Ruling

Subject: Fringe benefits tax remote area transport exemption

All legislative references are to the Fringe Benefits Tax Assessment Act 1986 unless otherwise stated.

Question 1

In respect of X, will the proposed provision of flights to FIFO employees between their usual place of residence and the relevant state capital airport within Australia constitute exempt residual benefits pursuant to subsection 47(7) where the cost of the flights is initially incurred on the X corporate credit card held by the FIFO employee’s manager?

Answer

Yes

Question 2

In respect of X, will the proposed provision of flights to FIFO employees between their usual place of residence and the relevant state capital airport constitute exempt residual benefits pursuant to subsection 47(7) where the cost of the flights is initially incurred on the X central corporate credit card?

Answer

Yes

Question 3

In respect of Y, will the provision of flights to FIFO employees between their usual place of residence and the relevant state capital airport constitute exempt residual benefits pursuant to subsection 47(7) where the cost of the flights is initially incurred on the Y corporate credit card held by the employee’s manager or the employee’s manager’s manager?

Answer

Yes

Question 4

In respect of X, will the proposed new arrangement give rise to an effective salary sacrifice arrangement?

Answer

Yes

This ruling applies for the following periods:

FBT year ended 31 March 2020

FBT year ended 31 March 2021

FBT year ended 31 March 2022

FBT year ended 31 March 2023

FBT year ended 31 March 2024

FBT year ended 31 March 2025

The scheme commences on:

FBT year ended 31 March 2020

Relevant facts and circumstances

1. X and Y are both related employers which operate the same business in two different locations, in two states within Australia.

X

2. X operates the business in a remote part of a state within Australia.

3. X makes use of fly-in fly-out (FIFO) arrangements for certain employees whose usual place of employment is in that part of the state. These arrangements cover airline transport of employees to the work sites and the provision of accommodation within proximity of the work sites. Due to the remote nature of the vast majority of X’s operations, FIFO arrangements are necessary as there is not the number of required employees and contractors with the appropriate skills living in the region.

4. Given the remote location of the work sites, the majority of X’s employees that are based at the remote part of the state work on a FIFO roster, departing from the airport in that state’s capital city.

5. X arranges and incurs the cost of charter or commercial flights from the airport in that state’s capital city to the work sites. The travel cost is borne by X and is not subject to any form of salary sacrifice arrangement (i.e. X initially and ultimately bears the cost of this travel). This travel is not being considered for the purposes of this ruling.

6. Under the proposed arrangements, the employee’s flights between their home location and the state capital city airport will be subject to the following booking and payment arrangements:

● The FIFO employee will complete a form detailing the required travel between their home location and the state capital city airport, attaching their roster details;

● X’s travel administrator, upon receipt of the completed form, will book the employee’s flights between their home location and the state capital city airport as a business expense via the portal’ under their own profile/access rights;

● The travel administrator will pay for the flights with either:

● the XC corporate credit card of the FIFO employee’s Manager; or

● the YC corporate credit card held for central purchasing purposes;

● Where the XC corporate credit card is used, under the first option, the employee’s manager will lodge a claim with X to have the XC corporate credit card balance paid on the due date;

● Under the terms and conditions for the X corporate credit card issued to the employer’s employees including managers, provides that the employee credit card holder is liable for all charges, except certain expenses for which they have not been reimbursed. The employer is then liable for those certain expenses of the employer for which the employer has not reimbursed the employee credit card holder.

● If there are any cancellation fees or rebooking fees in relation to the travel, it will be charged to the credit card used to book the flight – the manager’s card.

● If the balance of the credit card is not paid, as the flights are those certain expenses, the credit card provider will pursue X for payment.

● The expense claim process is, in part, an internal control that precedes monthly settlement of the corporate credit card statements by X (i.e. the supporting documentation provided as part of the claim process gives X comfort that the statement amount arises from business expenses, therefore, it can settle the monthly statement amount). It also allows the expenses to be allocated correctly in X’s accounting system. In the vast majority of cases the expense claim process confirms the amounts on the statement are business expenses; therefore X simply settles the statement amount via a payment to the credit card provider. So the ordering of steps is essentially:

● Cardholder uses the card to pay for a business expense;

● During the following month the cardholder submits an expense claim that verifies the statement amount relates to business expenses;

● The employer settles the statement amount via a payment to credit card provider after the statement period.

7. X and the relevant employee will enter into a written salary sacrifice arrangement that authorises the flight cost borne by X to be sacrificed against the employee’s subsequent salary. This agreement would authorise X to retain the flight costs from the employee’s pre-tax earnings before the employee has earned the entitlement to receive that amount as salary or wages. The employee will also permanently forgo the sacrificed salary for the period of the arrangement.

8. For X, using the Business Travel Account (BTA) that exists in respect of the YC corporate credit card the flow of funds regarding how the salary sacrifice arrangement will work in practice to pay for the cost of the airfares following an initial request by an employee to book flights is as follows:

● Flights will be paid in month x from the BTA held with the credit card provider (the BTA being essentially akin to a Corporate Credit Card but without a card physically existing).

● A BTA statement is generated approximately x weeks into the following month (i.e. month x) detailing all the flights booked using the BTA in the previous month (i.e. during month x).

● Following a review of the BTA transactions, internal approval for a single payment to settle the BTA takes place approximately x weeks into month x (it must be approved by the x day of month x).

● Payment to the credit card provider from X to settle the BTA will then take place late in month x early in month x.

At the same time that the BTA is approved to be settled a file is sent to Payroll detailing the cost of the flights paid under the BTA in month x and who the relevant employees are. Payroll will then complete the salary sacrifice against the relevant employees in the next pay cycle (being a x pay cycle).

● In the event that the cost of the flights would be greater than the employee’s pre-tax salary, any excess will rollover to the next pay period.

9. X will continue to book and pay for the costs of charter or commercial flights between the state capital city airport and the work site.

10. Dependent on flight schedules, employees may be required to spend a night in the state capital city whilst en-route to the work site. In these circumstances, employees will be responsible for booking and paying for accommodation, if required. X will not cover the cost, nor assist with the booking of this accommodation.

11. X’s FIFO employees, whilst at the work site, stay in X provided accommodation at or near to the site. The accommodation is either on, or immediately adjacent to or a short commute from the site.

12. X’s FIFO employees work set rosters, which sees them work a number of days at the site followed by a period of leave where they must leave the site and return to their usual place of residence.

13. X’s operations and the nearby towns are not in or adjacent to an eligible urban area. Accordingly, they are in an area designated as a ‘remote area’.

14. The remoteness of X’s work sites and the location of the FIFO employee’s usual place of residence mean that daily travel between the two is unreasonable.

X alternative scenario

15. Rather than have X’s travel administrator book the X employee’s flights using the travel administrator’s portal ‘profile’ / access rights, the employee would set up their own profile on the portal and book the flights themselves. The flights would, though, continue to be paid for using the XC corporate credit card (noting each Connect Portal profile requires a credit card linked to it on which the related costs of booked travel are incurred, including any rebooking, cancellation or other fees). The employee’s manager will lodge a claim with X to have the XC corporate credit card balance paid on the due date.

16. The flow of funds for how the salary sacrifice arrangement will work in practice to pay for the cost of the airfares in the situation following an initial request by an employee to book flights is the same as for the X main scenario.

Y

17. Y owns and operates the same business in another remote location in a different state in Australia.

18. The majority of the workforce at that location reside or are accommodated in a nearby township.

19. Y is introducing FIFO arrangements between certain employees’ usual place of residence and the relevant state capital city. Existing charter flights will transport these employees between the relevant state capital city and the work site at the remote location.

20. The employee’s flights between their home location and the state capital city airport will be subject to the following booking and payment arrangement:

● The FIFO employee will complete a form detailing the required commercial airline travel between their home location and the state capital airport, attaching their roster details;

● Y’s site administrator, upon receipt of the completed form, will book the employee’s flights between their home location and the state capital airport, via the travel portal’;

● The site administrator will pay for the flights with the YC corporate credit card; and

● The employee’s manager or the employee’s manager’s manager will lodge an expense claim with Y to have the YC corporate credit card balance paid on the due date. This cost will be borne by Y and will not be subject to any form of salary sacrifice arrangements.

● The expense claim process for Y operates in the same way as that for X.

21. Y will, as is currently the case for employees travelling by flight to the work site, book and pay for the charter flights between the state capital city airport and the site.

22. Dependent on flight schedules, the FIFO employees may be required to spend a night in the state capital city whilst en-route to the site. In these circumstances, Y will arrange overnight accommodation at the same time as the flights are arranged and incur the cost. Y will meet this cost and not seek reimbursement from the employee.

23. The Y FIFO employees, whilst at the site, will stay in Y provided accommodation near to the site. This accommodation will be in a nearby township.

24. The Y FIFO employees work set rosters, which sees them work a number of days at site followed by a period of leave where they must leave the site and return to their usual place of residence.

25. The township is not in or adjacent to an eligible urban area. Accordingly, it is designated as a remote area.

26. The remoteness of the work site and the location of the FIFO employee’s usual place of residence mean daily travel between the two is unreasonable.

Y alternative scenario

27. Rather than booking flights using the travel administrator’s profile on the portal, the travel administrator may also send an email or electronic booking form to D for D to then book the flights outside of the travel administrator’s profile (but note the flights will still be paid with the YC corporate credit card).

28. The employee’s manager or the employee’s manager’s manager will lodge an expense claim with Y to have the Y corporate credit card balance paid on the due date. This cost will be borne by Y and will not be subject to any form of salary sacrifice arrangements.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 section 20

Fringe Benefits Tax Assessment Act 1986 section 45

Fringe Benefits Tax Assessment Act 1986 subsection 47(7)

Fringe Benefits Tax Assessment Act 1986 subsection 136(1)

Fringe Benefits Tax Assessment Act 1986 section 150

Reasons for decision

All legislative references are to the Fringe Benefits Tax Assessment Act 1986 unless otherwise stated.

Question 1

Summary

For X in both the main scenario and alternative scenario, the proposed provision of flights to FIFO employees between their usual place of residence and the relevant state capital airport will constitute exempt residual benefits pursuant to subsection 47(7) where the cost of the flights is initially incurred on the XC corporate credit card.

Detailed reasoning

The provision of the travel, under a salary sacrifice arrangement, will give rise to a benefit as defined in subsection 136(1).

The benefit will be a fringe benefit where it meets the definition of ‘fringe benefit’ as defined in subsection 136(1).

The definition of fringe benefit in subsection 136(1) excludes at paragraph (g) a benefit that is an exempt benefit in relation to the year of tax.

For the purposes of this ruling, the relevant exemption is the exemption provided under subsection 47(7) for a residual benefit that consists of the provision of fly-in fly-out transport.

Is the benefit a residual benefit?

As section 47 provides the exempt residual benefits, it is necessary to consider whether the benefit is a residual benefit.

Section 45 provides that a benefit will be a residual benefit if it is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive). Divisions 2-4 and 6-10 are not relevant to this scheme. Division 5 and Division 11 may be relevant to this scheme.

Expense payment benefits

Division 5 applies to expense payment fringe benefits.

Section 20 states that an expense payment benefit will arise where the provider either:

a) Makes a payment in discharge, in whole or in part, of an obligation of another person (the recipient) to pay an amount to a third person in respect of an amount of expenditure incurred by the recipient; or

b) Reimburses the recipient, in whole or in part, in respect of an amount of expenditure incurred by the recipient.

The operation of the expense payment benefit provisions is summarised in section 9.1 of the ATO view product Fringe benefits tax: a guide for employers (https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/In-detail/FBT---a-guide-for-employers/), which provides that:

9.1 What is an expense payment fringe benefit?

An expense payment fringe benefit may arise in either of two ways:

1. you (the employer) reimburse an employee for expenses they incur

2. you pay a third party in satisfaction of expenses incurred by an employee.

In either case, the expenses may be business expenses or private expenses, or a combination of the two.

It is important to note that the rules in this chapter apply to expenses incurred by an employee that are reimbursed or paid by you, the employer. They don’t apply to goods or services you purchase directly and provide to the employee. Nor do they apply to goods or services purchased using your credit card. Goods or services acquired in these ways are subject to valuation under the property or residual benefit rules discussed in Property fringe benefits and Residual fringe benefits.

Generally, where expenditure has been incurred by an employee as an agent for the employer, and the employer subsequently reimburses the employee or pays a third party directly, an expense payment benefit arises, not a property or residual benefit.

In both the main scenario and alternative scenario, the cost of the flight is paid for by the employer X as a business expense pursuant to the terms and conditions for use of the XC corporate credit card and the employer is discharging their own obligation. Furthermore, X’s expense claim process used by the manager after their X corporate credit card is used to pay for the flights is that of substantiation/verification of business expenses rather than reimbursement. The employer X is therefore not discharging an obligation of the employee’s manager to pay a third person in respect of expenditure incurred by that person, nor providing a reimbursement to the employee’s manager in respect of expenditure incurred by that person.

Section 150, dealing with credit cards, supports this position on the FBT treatment of the use of the manager’s X corporate credit card. Section 150 states:

For the purposes of this Act, where, in respect of the employment of an employee of an employer, the employee or an associate of the employee uses a credit card issued by a third person to, or to an associate of, the employer to obtain the provision of a benefit on credit from a fourth person, the following provisions have effect:

(a) the fourth person shall be taken to have provided the benefit, in respect of that employment, under an arrangement between:

(b) (i) the employer or the associate of the employer, as the case requires; and

(ii) the fourth person;

(c) where the employer or the associate of the employer, as the case may be, incurred expenditure to the third person under an arm's length transaction in respect of the provision of the benefit - the employer or the associate of the employer, as the case requires, shall be taken to have incurred that expenditure to the fourth person under an arm's length transaction.

The Explanatory Memorandum to the Fringe Benefits Tax Assessment Bill 1986, states, with respect to section 150:

Clause 150: Credit cards

The effect of clause 150 is to ensure, broadly, that benefits obtained by an employee or an associate through the use of a credit card issued to an employer or an associate will be treated, where appropriate, as taxable fringe benefits [emphasis added].

It will apply where, in respect of the employee's employment, use is made of such a credit card to obtain goods or services. The person e.g., a retailer who provides the goods or services will be taken to have provided the relevant benefit in respect of the employee's employment, under an arrangement with the employer or, if the card was issued to an associate of the employer, under an arrangement with associate.

In addition, where the employer or associate has borne the cost of the benefit by paying the issuer of the credit card, the relevant expenditure will be taken to have been incurred to the actual provider of the benefit e.g., the retailer.

Subsection 150(a) provides that where an employee or an associate of the employee acquires a benefit on credit by using a credit card issued to the employer or an associate of the employer, the benefit is considered to have been provided under an arrangement between the employer or the associate of the employer, and the person who provided the recipient with the benefit. This means that the benefit is taken to have been given directly to the recipient by the employer, not indirectly as an expense payment benefit. Instead, the employee will be the recipient of a property benefit or a residual benefit, as is the case here.

In addition, under subsection 150(b), as the employer has borne the cost of the benefit directly by paying the issuer of the credit card, the employer is taken to have incurred the relevant expenditure to the actual provider of the benefit, in this case the airline.

The benefit is therefore not an expense payment benefit under section 20.

Property benefits

Division 11 applies to property fringe benefits.

Section 40 states:

Where, at a particular time, a person (in this section referred to as the ‘provider’) provides property to another person (in this section referred to as the ‘recipient’), the provision of the property shall be taken to constitute a benefit provided by the provider to the recipient at that time.

Subsection 136(1) provides the following definitions relevant to property benefits:

‘property’ means:

(a) intangible property; and

(b) tangible property.

‘tangible property’ means goods and includes:

(a) animals, including fish; and

(b) gas and electricity.’

‘intangible property’ means:

(a) real property;

(b) a chose in action; and

(c) any other kind of property other than tangible property;

but does not include:

(d) a right arising under a contract of insurance; or

(e) a lease or licence in respect of real property or tangible property.

‘property benefit’ means a benefit referred to in section 40, but does not include a benefit that is a benefit by virtue of a provision of Subdivision A or Divisions 2 to 10 (inclusive) of Part III.

The term ‘goods’ is not defined in the FBTAA and therefore takes its ordinary meaning. The Macquarie Dictionary Online, 2017, Macquarie Dictionary Publisher, an imprint of Pan Macmillan Australia Pty Ltd, www.macquariedictionary.com.au (the Macquarie Dictionary) defines the term ‘goods’ relevantly at paragraphs 1 and 2 as:

1. (plural) possessions, especially movable effects or personal belongings.

2. (plural) articles of trade; wares; merchandise, especially that which is transported by land.

The airline ticket therefore does not meet the definition of ‘goods’ and is therefore not tangible property.

Paragraph 136(1)(e) relevantly excludes from the definition of intangible property leases or licences in respect of real property or tangible property.

Licence is not defined in the FBTAA, the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997. It therefore takes on its ordinary meaning.

The Macquarie Dictionary defines the term ‘licence’ (as relevant here) as:

licence

noun

1. formal permission or leave to do or not to do something.

2. formal permission from a constituted authority to do something, as to carry on some business or profession, to be released from jail for part of one’s sentence under specific restrictions, etc.

3. a certificate of such permission; an official permit. …

The ticket provides the employee with the formal permission to receive transport on the aeroplane and is therefore not intangible property.

As the airline ticket is neither tangible nor intangible property, the provision of the ticket is not a property benefit.

Therefore, the benefit provided by the employer X does not fall within any of the provisions of Subdivision A of Divisions 2 to 11 and as such is a residual benefit per section 45.

Is the benefit exempt under subsection 47(7)?

As the benefit is a residual benefit, consideration needs to be given as to whether the benefit is an exempt residual benefit under subsection 47(7).

Subsection 47(7) states

Where, during a period of employment with an employer:

(a) an employee’s usual place of employment is:

(i) on an oil rig, or other installation, at sea; or

(ii) at a location in a State or internal Territory but not in, or adjacent to, an eligible urban area; or

(iii) at a remote location that is not in a State or internal Territory; and

(b) the employee is provided with residential accommodation, at or near that usual place of employment, by:

(i) the employer; or

(ii) an associate of the employer; or

(iii) a person (in this subparagraph referred to as the ‘arranger’) other than the employer or an associate of the employer under an arrangement between:

(A) the employer or an associate of the employer; and

(B) the arranger or another person; and

(c) the employee, on a regular basis:

(i) works for a number of days and has a number of days off; and

(ii) on completion of the working days, travels from that usual place of employment to his or her usual place of residence and, on completion of the days off, returns from his or her usual place of residence to that usual place of employment; and

(d) the employee is provided with transport on a regular basis in connection with the travel referred to in subparagraph (c)(ii) and that transport is provided by:

(i) the employer, or

(ii) an associate of the employer; or

(iii) a person (in this subparagraph referred to as the ‘arranger’) other than the employer or an associate of the employer under an arrangement between:

(A) the employer or an associate of the employer; and

(B) the arranger or another person; and

(e) it would be unreasonable to expect the employee to travel on a daily basis on work days between:

(i) that usual place of employment; and

(ii) the location of the employee’s usual place of residence;

having regard to the location of those places;

the residual benefit constituted by the provision of transport referred to in paragraph (d) is an exempt benefit.

(A) Is the employee’s usual place of employment at a remote location in Australia or overseas, or on oil rigs or other installations at sea?

A remote location is one that is not located in or adjacent to an ‘eligible urban area’ as defined in section 140.

Under paragraph 140(1)(a), an ‘eligible urban area’ is an area that is either:

● situated in a zone, as defined for the purposes of the zone offset or rebate in section 79A Income Tax Assessment Act 1936, and is an urban centre with a 1981 census population of not less than 28,000; or

● not situated in a zone and is an urban centre with a 1981 census population of not less than 14,000.

Under paragraph 140(1)(b), a location is adjacent to an eligible urban area if, at 24 June 1986, it was:

● less than 40 km by the shortest practicable surface route from the centre of an eligible urban area with a 1981 census population of less than 130,000; or

● less than 100 km by the shortest practicable surface route from the centre of an eligible urban area with a 1981 census population of not less than 130,000.

The X employee’s usual place of employment during their assignment period is not situated in or adjacent to an eligible urban area for the purposes of section 140.

(B) Are the employees provided with accommodation at or near the worksite on working days by the employer, an associate of the employer or an arranger?

The X employees are provided with accommodation at or near the worksite on working days by the employer.

(C) Do the employees, on a regular basis, work for a number of days followed by a number of days off, and travels to their usual place of residence on their days off?

The X employees work for a number of days on and have a number of days off. On completion of the work days, the employees travel from that usual place of employment to his or her usual place of residence. On completion of the days off, the employee returns from his or her usual place of residence to that usual place of employment.

(D) Is the employee regularly provided with transport in connection with the travel between their usual place of residence and place of employment?

The X employees are provided with transport (arranged and paid for by X) on a regular basis, being flights between their home location and the relevant state capital airport. X then provides additional flights to transport the employees between the relevant state capital airport and the site, although these additional fights are not being considered for the purposes of this ruling.

In looking at whether the transport provided to an employee by X, being the flights between their home location and the relevant state capital airport, is ‘in connection’ with the employee’s travel between their usual place of residence and place of employment, reference can be made to Taxation Determination TD 2015/12 Fringe benefits tax: when are the duties of the employment of an employee of an employer who is a government body exclusively performed in, or in connection with, a public hospital or a hospital carried on by a society that is a rebatable employer?, which states in part:

53. In Collector of Customs v. Cliffs Robe River Iron Associates per Bowen CJ, Norling and Neaves JJ at paragraph 16:

The meaning of the word ‘connection’ is both wide and imprecise. One of its common meanings is ‘relation between things one of which is bound up with, or involved, in another.’

The meaning of the phrase 'in connection with' was discussed in Burswood Management Ltd v A-G (1990) 23 FCR 144. In a joint decision the court said: 'The words "in connection with" are words of wide import; and the meaning to be attributed to them depends on their context and the purpose of the statute in which they appear.'

This means that to be ‘in connection with’ the travel undertaken between the employee’s usual place of residence and their usual place of employment, the transport provided by X does not have to be a ‘door to door’ service. It can form part of the overall travel undertaken providing the start and end points are the employee’s usual place of employment and their usual place of residence.

Therefore the return flights between the employee’s usual place of residence and the relevant state capital airport are ‘in connection with the travel referred to in subparagraph (c)(ii)’.

(E) Having regard to the location of the two places, is it unreasonable to expect the employee to travel to and from work on a daily basis?

It would be unreasonable to expect the employee to travel on a daily basis on work days between the employee’s usual place of employment and their usual place of residence, having regard to the location of these places.

The requirements of subsection 47(7) are met and the provision of the fly-in fly-out travel is therefore exempt from fringe benefits tax as an exempt residual benefit.

Question 2

For the same reasons given at Question 1, in respect of X, the proposed provision of flights to FIFO employees between their usual place of residence and the relevant state capital airport will constitute exempt residual benefits pursuant to subsection 47(7) where the cost of the flights is initially incurred on X’s corporate credit card held for central purchasing purposes.

Question 3

For the same reasons given at Question 1, in respect of Y, in both the main scenario and alternative scenario, the provision of flights to FIFO employees between their usual place of residence and the relevant state capital airport will constitute exempt residual benefits pursuant to subsection 47(7) where the cost of the flights is initially incurred on a Y corporate credit card held by the employee’s manager or the employee’s manager’s manager.

Question 4

Summary

In respect of X, the proposed new arrangement will give rise to an effective salary sacrifice arrangement.

Detailed reasoning

The Commissioner has detailed in Taxation Ruling TR 2001/10 and on the ATO website (https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/Salary-sacrifice-arrangements/Requirements-for-an-effective-salary-sacrifice-arrangement/) the conditions that need to be in existence for a salary sacrifice arrangement to be effective. In summary, the following requirements should exist:

● The arrangement needs to be put in place prior to the performance of the work that gives rise to the salary (i.e. the employee is giving up a future entitlement to salary);

● There should be a written agreement between the employee and employer detailing the terms of the arrangement; and

● The employee must permanently forego the amount of salary being sacrificed.

In this instance, X and the relevant employee will enter into a written salary sacrifice arrangement that authorises the flight cost borne by X to be sacrificed against the employee’s subsequent salary. This agreement would authorise the reimbursement to X of the flight costs from the employee’s pre-tax earnings before the employee has earned the entitlement to receive that amount as salary or wages. The employee will also permanently forgo the sacrificed salary for the period of the arrangement.

All the necessary requirements will then be in existence in order for the proposed new arrangement to give rise to an effective salary sacrifice arrangement.

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