ATO Interpretative Decision
ATO ID 2001/803
Fringe Benefits Tax
Fringe Benefits Tax: Living away from home and expenditure incurred in respect of accommodationFOI status: may be released
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether the term "in respect of accommodation" contained in paragraph 21(b) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) includes the reimbursement or payment by the employer of mortgage expenses in respect of a house purchased by an employee and used as a dwelling by the employee and members of the employee's family while they are temporarily residing in Australia?
Decision
No. The term "in respect of accommodation" contained in paragraph 21(b) of the FBTAA does not include the reimbursement or payment by the employer of mortgage expenses in respect of a house purchased by an employee and used as a dwelling by the employee and members of the employee's family while they are temporarily residing in Australia.
Facts
The employee and members of the employee's family arrived in Australia on a prearranged three to four year employment assignment.
The intention of the employer and the employee is that the employee will only remain in Australia for the anticipated duration of the assignment, which is not expected to exceed four years.
But for the assignment in Australia, the employee would not have established a residence in Australia and would have continued to reside overseas.
The employee will continue to maintain an overseas residence which will be let during the duration of the employee's assignment in Australia.
The employee would prefer to purchase a house in which to live while temporarily residing in Australia.
The employee would have leased a property instead of purchasing a house if a suitable rental property had been available.
The employer proposes to compensate the employee by way of reimbursement for mortgage expenditure incurred by the employee.
Reasons for Decision
The expenditure which is reimbursed or paid by the employer is considered to be expenditure in respect of a mortgage connected with the acquisition of a house. It is not considered to be "in respect of accommodation" for the purposes of paragraph 21(b) of the FBTAA. Accordingly the expense payment benefit is not an exempt accommodation expense payment benefit under section 21 of the FBTAA.
Date of decision: 27 November 2001Year of income: Year ending 31 March 2002 Year ending 31 March 2003 Year ending 31 March 2004 Year ending 31 March 2005 Year ending 31 March 2006
Legislative References:
Fringe Benefit Tax Assessment Act 1986
Section 21
Paragraph 21(b)
Keywords
Fringe benefits tax
Living away from home allowance fringe benefits
FBT Living away from home
Exempt accommodation component
Exempt food component
Date reviewed: 2 May 2018
ISSN: 1445-2782