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This edited version has been archived due to the length of time since original publication.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.

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Edited version of your written advice

Authorisation Number: 1051506942448

Date of advice: 16 April 2019

Ruling

Subject: Fringe Benefits Tax: Loan fringe benefits - otherwise deductible rule

Question 1

Would employees be entitled to a once-only deduction in respect of the gross interest on employee share loans if the employee had incurred the interest expense, thereby satisfying the requirements of paragraph 19(1)(b) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

No.

Question 2

Is the requirement to provide employee declarations in the approved format waived under subparagraph 19(1)(c)(ii) of the FBTAA?

Answer

Yes.

This ruling applies for the following period(s)

Year ending 31 March 2018

The scheme commences on

1 April 2017

Relevant facts and circumstances

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 109D

Income Tax Assessment Act 1997 Section 8-1

Fringe Benefits Assessment Act 1986 Section 16(1)

Fringe Benefits Assessment Act 1986 Section 19

Fringe Benefits Assessment Act 1986 Subsection 19(1)

Fringe Benefits Assessment Act 1986 Paragraph 19(1)(b)

Fringe Benefits Assessment Act 1986 Paragraph 19(1)(c)

Fringe Benefits Assessment Act 1986 Subparagraph 19(1)(c)(ii)

Fringe Benefits Assessment Act 1986 Subsection 136(1)

Reasons for decision

Question 1

Would employees be entitled to a once-only deduction in respect of the gross interest on employee share loan benefits if the employee had incurred the interest expense, thereby satisfying the requirements of paragraph 19(1)(b) of the FBTAA?

Summary

Employee participants would not be entitled to claim a once-only income tax deduction under the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997, had they incurred interest on the loan and therefore do not satisfy the requirements of paragraph 19(1)(b).

Detailed reasoning

Otherwise Deductible Rule

Deductions for interest

Expenditure incurred prior to assessable income

Question 2

Is the requirement to provide employee declarations in the approved format waived under subparagraph 19(1)(c)(ii) of the FBTAA?

Summary

The requirement to provide employee declarations in the approved format in respect of the loan concerned is waived under subparagraph 19(1)(c)(ii) because the fringe benefit is an employee share loan benefit in relation to the year of tax.

Detailed reasoning

Declaration by employee


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