Edited version of private ruling

Authorisation Number: 1011800885097

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Ruling

Subject: fringe benefits tax: residual benefit - exempt accommodation - usual place of residence

Question 1

Is the provision of on-site accommodation to the employee, in scenario 1, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

No.

Question 2

Is the provision of on-site accommodation to the employee, in scenario 2, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

No.

Question 3

Is the provision of on-site accommodation to the employee, in scenario 3, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

No.

Question 4

Is the provision of on-site accommodation to the employee, in scenario 4, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

Yes.

Question 5

Is the provision of on-site accommodation to the employee, in scenario 5, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

Yes.

Question 6

Is the provision of on-site accommodation to the employee, in scenario 6, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

Yes.

Question 7

Is the provision of on-site accommodation to the employee, in scenario 7, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

Yes.

Question 8

Is the provision of on-site accommodation to the employee, in scenario 8, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

No.

Question 9

Is the provision of on-site accommodation to the employee, in scenario 9, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

No.

Question 10

Is the provision of on-site accommodation to the employee, in scenario 10, a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Answer

No.

This ruling applies for the following period:

Year ended 31 March 2011

The scheme commenced on:

1 April 2010

Relevant facts and circumstances:

You have provided details of a number of employees for whom you provide accommodation.

From the information provided the employees fit into one of the following arrangements:

Scenario 1

· on-site accommodation located in a remote area

· the employee has another residence to which they intend to return at the end of their term of employment

· the employee returns to the former residence four times a year

· the employee has their belongings at the other residence, and

· the employee does not have a spouse or children

Scenario 2

· on-site accommodation located in a remote area

· the employee does not own another residence

· the employee's family resides with the employee in the on-site accommodation

Scenario 3

· on-site accommodation located in a remote area

· the employee does not own another residence

· the employee does not have a spouse or children

Scenario 4

· on-site accommodation located in a non-remote area

· the employee does not own another residence

· the employee has their belongings on-site

· the employee's family resides with the employee in the on-site accommodation

Scenario 5

· on-site accommodation located in a non-remote area

· the employee does not own another residence

· the employee has their belongings on-site

· the employee does not have a spouse or children

Scenario 6

· on-site accommodation located in a non-remote area

· the employee owns another residence

· the other residence is occupied by tenants

· the employee does not return to the residence during the year

· the employee has their belongings on-site

· the employee's family resides with the employee in the on-site accommodation

Scenario 7

· on-site accommodation is located in a non-remote area

· the employee owns another residence

· the employee returns to the other residence once or twice a year

· the employee's family resides with the employee in the on-site accommodation

Scenario 8

· on-site accommodation is located in a non-remote area

· the employee owns another residence

· the employee returns to the other residence at least four times a year

· the employee does not have a spouse or children

Scenario 9

· on-site accommodation is located in a non-remote area

· the employee owns another residence

· the employee's family resides at the other residence

· the employee returns to the other residence at least four times a year

Scenario 10

· on-site accommodation is located in a non-remote area

· the employee owns another residence

· the employee's family resides at the other residence

· the employee does not return to the other residence

· the employee intends to return to the family residence upon termination of their employment

· the employee's mail is sent to the on-site accommodation

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 Section 25.

Fringe Benefits Tax Assessment Act 1986 Subsection 47(5).

Fringe Benefits Tax Assessment Act 1986 Section 58ZC.

Fringe Benefits Tax Assessment Act 1986 Subsection 136(1).

Fringe Benefits Tax Assessment Act 1986 Subsection 140(1)

Reasons for decision

Is the provision of on-site accommodation to the relevant employee a fringe benefit that incurs a liability under any part of Divisions 2 to 12 inclusive of the FBTAA?

Summary

In determining whether a fringe benefit will arise from the provision of accommodation, it is necessary to look at the particular circumstances of the employee.

Accommodation provided to your employees will be a housing fringe benefit except for those employees who are either:

· working in a remote area, or

· are required to live away from their usual place of residence, and

· provide you with a declaration in the approved form.

Detailed reasoning

You provide on-site accommodation to employees at various locations. A number of the locations are in a remote area.

In general terms the provision of the accommodation will be a fringe benefit unless it is an exempt benefit. The FBTAA specifies that certain benefits will be an exempt benefit.

For the purpose of this ruling, the relevant exemptions are those contained in subsection 47(5) and section 58ZC of the FBTAA.

Subsection 47(5) of the FBTAA

In general terms subsection 47(5) of the FBTAA provides that the accommodation provided will be an exempt benefit where the employee is required to live away from their usual place of residence in order to perform their employment duties. Subsection 47(5) states:

(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;

(ii) 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.

Therefore, the provision of accommodation will be an exempt benefit under subsection 47(5) of the FBTAA if the following conditions are satisfied:

1. the benefit is a residual benefit consisting of the provision of accommodation

2. the accommodation is provided as the employee is required to live away from their usual place of residence

3. the employee is not travelling while performing their employment duties, and

4. the employee provides a declaration in the approved form.

Section 58ZC of the FBTAA

By contrast, the provision of accommodation may be an exempt benefit under section 58ZC of the FBTAA where the accommodation is located in a remote area and is the employee's usual place of residence. Subsection 58ZC(2) of the FBTAA states:

A housing benefit in relation to an employer for a year of tax and for a unit of accommodation, being a benefit provided to an employee of the employer in respect of the employee's employment, is a remote area housing benefit if:

(a) during the whole of the tenancy period, the unit of accommodation was located in a State or internal Territory and was not at a location in, or adjacent to, an eligible urban area; and

(b) during the whole of the tenancy period, the recipient was a current employee of the employer and the usual place of employment of the recipient was not at a location in, or adjacent to, an eligible urban area; and

(c) (Repealed by No 77 of 2005)

(d) it would be concluded that it was necessary for the employer, during the year of tax, to provide, or to arrange for the provision of, residential accommodation for employees of the employer because:

(i) the nature of the employer's business was such that employees of the employer were liable to be frequently required to change their places of residence; or

(ii) there was not, at or near the place or places at which the employees of the employer were employed, sufficient suitable residential accommodation for those employees (other than residential accommodation provided by or on behalf of the employer); or

(iii) it is customary for employers in the industry in which the recipient was employed during the tenancy period to provide residential accommodation for their employees free of charge or for a rent or other consideration that is less than the market value of the right to occupy or use the accommodation concerned; and

(e) the recipients overall housing right was not granted to the recipient under:

(i) a non-arm's length arrangement; or

(ii) an arrangement that was entered into by any of the parties to the arrangement for the purpose, or for purposes that included the purpose, of enabling the employer to obtain the benefit of the application of this section.

Therefore, the provision of accommodation will be a remote area housing benefit if the following conditions are satisfied:

1. employee is provided with a housing benefit

2. the unit of accommodation is located in a remote area

3. for the whole of the tenancy period the unit of accommodation is occupied by the employee who's usual place of employment is in a remote area

4. one of the following three conditions must also be met:

· the nature of your business is such that employees are liable to move frequently from one residential location to another, or

· there is insufficient suitable residential accommodation otherwise available at or near the place or places where the employees are employed, or

· it is customary for employers in that industry to provide free or subsidised accommodation for employees.

In comparing these two provisions it can be seen that the appropriate provision to consider will depend upon whether the provision of the accommodation is a housing benefit, or a residual benefit.

What is a housing benefit?

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.

Usual place of residence

The term 'usual place of residence' is not defined in the FBTAA, however, 'place of residence' is defined under subsection 136(1) of the FBTAA to be, a place at which the person resides; or a place at which the person has sleeping accommodation.

Miscellaneous Taxation Ruling MT 2030: Living-away-from-home allowance benefits discusses what is meant by the term 'usual place of residence' at paragraphs 11 to 25.

Paragraph 12 states:

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 work "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.

Paragraph 14 states:

….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…

Paragraphs 15 to 18 provide a brief description of the decisions from some cases which illustrate these concepts. It is concluded at paragraph 19 that:

an underlying theme of cases is the general presumption that the employees usual place of residence will be close to where he or she is permanently employed.

Since the release of MT 2030, the meaning of the term usual place of residence has been considered by the Administrative Appeals Tribunal in a number of cases including Case U110 87 ATC 663.

This case concerned an employee who accepted his employer's request to move temporarily from Adelaide to Sydney for six to nine months to oversee one particular problem project. Although the employee owned a home in Adelaide and considered the move to be temporary as he intended to return to Adelaide, the Tribunal decided that the Adelaide house was not the usual place of abode.

Senior Member BJ McMahon at 666 stated:

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.

The tribunal distinguished the decisions of the Boards of Review in Case C55 71 ATC 242 and Case R99 84 ATC 650 on the basis that in those cases the taxpayers usually lived and slept in the places of abode at regular intervals. In Case C55 the employee's family continued to live in the main place of abode which the employee returned to every second weekend, while in Case R99 the employee returned to his parent's home where he had left most of his belongings each weekend.

At 667 Senior Member BJ McMahon stated:

To my mind the supposed temporary nature of the move has no relevance in determining the issue. Ties with friends have nothing to do with ties to a former place of abode. He does not appear to have had any ties to this nature save those of a landlord and later of an employ property owner. These would not be sufficient to convert the premises to his usual place of abode even if, as I do not believe, they could be regarded as his unusual or casual place of abode. His heart may well have been in Adelaide but at all material times his home was in Sydney.

The fact that some of the employees have rented out their premises is not sufficient to find that they are living away from their usual place of residence.

Case Y40 91 ATC 393 and Case Y51 91 ATC 453 involved employees who were temporarily transferred by their employer from Perth to Karratha. Both employees rented out their Perth homes.

In deciding that the usual place of residence of the employee in Case Y40 was Karratha, Deputy President Dr P Gerber stated at ATC 396:

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.

This decision was applied in Case Y40 where Deputy President PW Johnston stated at ATC 456:

… even though the applicant, notwithstanding that he had left his home at [Perth], 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.

These cases illustrate that it is not just whether the employee maintains a house in an area to which the employee intends to return after working in another area that determines if the employee is living away from their usual place of residence. For example, although the employee may have a house in Sydney to which he or she intends to return to at the end of the contract, this fact by itself does not make the Sydney home the employee's usual place of residence. There are a number of other factors that may need to be considered including:

1. does the employee have another residence to which they intend to return?

2. is the term of employment temporary or permanent?

3. does the employee return to the former residence whilst employed at the new location?

4. are the employee's belongings kept at the former residence or at the new accommodation?

5. where does the employee's family reside?

In considering these factors in relation to each of the scenarios:

Is the accommodation provided to the employee in scenario 1 the employee's usual place of residence?

In scenario 1:

· the employee has another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee returns to their other residence four times a year, and

· the employee's belongings are kept at the other residence

In considering these factors it can be concluded that the employee has another residence as the employee regularly returns to the other residence which is where he or she is storing their belongings. This indicates the employee has retained the necessary connection with the other residence for it to be their usual place of residence.

Therefore, the relevant provision to be considered in relation to scenario 1 is subsection 47(5) of the FBTAA.

Is the accommodation provided to the employee in scenario 2 the employee's usual place of residence?

In scenario 2:

· the employee does not have another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee's belongings are kept in the on-site accommodation, and

· the employee's family resides with the employee

None of these factors indicate the employee has another residence to which he or she intends to return.

Therefore, the on-site accommodation in scenario 2 is considered to be the employee's usual place of residence and the relevant provision to consider is section 58ZC of the FBTAA.

Is the accommodation provided to the employee in scenario 3 the employee's usual place of residence?

In scenario 3:

· the employee does not have another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee's belongings are kept in the on-site accommodation, and

· the employee does not have a spouse or family

None of these factors indicate the employee has another residence to which he or she intends to return.

Therefore, the on-site accommodation in scenario 3 is considered to be the employee's usual place of residence and the relevant provision to consider is section 58ZC of the FBTAA.

Is the accommodation provided to the employee in scenario 4 the employee's usual place of residence?

In scenario 4:

· the employee does not have another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee's belongings are kept in the on-site accommodation, and

· the employee's family resides with the employee

None of these factors indicate the employee has another residence to which he or she intends to return.

Therefore, the on-site accommodation in scenario 4 is considered to be the employee's usual place of residence and the relevant provision to consider is section 58ZC of the FBTAA.

Is the accommodation provided to the employee in scenario 5 the employee's usual place of residence?

In scenario 5:

· the employee does not have another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee's belongings are kept in the on-site accommodation, and

· the employee does not have a spouse or family.

None of these factors indicate the employee has another residence to which he or she intends to return.

Therefore, the on-site accommodation in scenario 5 is considered to be the employee's usual place of residence and the relevant provision to consider is section 58ZC of the FBTAA.

Is the accommodation provided to the employee in scenario 6 the employee's usual place of residence?

In scenario 6:

· the employee has another residence

· the term of employment is ongoing, rather than for a fixed term

· the other residence is occupied by tenants

· the employee does not return to the other residence

· the employee's belongings are kept on-site, and

· the employee's family resides with the employee in the on-site accommodation

Although the employee has another residence, this by itself is not sufficient to find that they are living away from their usual place of residence.

Both Case Y40 and Case Y51 determined that the employees were not living away from their usual place of residence even though they were temporarily transferred by their employer from Perth to Karratha and they rented out their Perth homes.

In Case Y40, Deputy President PW Johnston found that for everyday purposes the new residence was where the applicant lived and maintained his home for the duration of his assignment. This was where his family resided, attended school and conducted their day to day activities.

In applying these decisions it can be concluded that the accommodation in scenario 6 is the employee's usual place of residence as the only connection the employee appears to have with the property he or she owns is that of a landlord. The employee does not return to the other property, the employee's belongings and family are with the employee at the on-site accommodation.

Therefore, the relevant provision to consider in relation to scenario 6 is section 58ZC of the FBTAA.

Is the accommodation provided to the employee in scenario 7 the employee's usual place of residence?

Scenario 7 is similar to scenario 6 as:

· the employee has another residence

· the term of employment is ongoing, rather than for a fixed term

· the other residence is occupied by tenants

· the employee's belongings are kept on-site, and

· the employee's family resides with the employee in the on-site accommodation

However, there is a slight difference as the employee returns to the other residence once or twice a year. While this fact does provide a connection with the other residence it is not sufficient to be able to conclude that the other residence is the usual place of residence.

In applying the decisions of the cases discussed in paragraphs 15 to 18 of MT 2030 and the decisions in Case Y40 and Case Y51 it can be concluded that the on-site accommodation is the employee's usual place of residence as the employee's family and belongings are with the employee in the on-site accommodation and the appointment to the position is ongoing, rather than fixed.

Therefore, the relevant provision to consider in relation to scenario 7 is section 58ZC of the FBTAA.

Is the accommodation provided to the employee in scenario 8 the employee's usual place of residence?

In scenario 8:

· the employee has another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee does not have a spouse or family, but

· the employee regularly returns to the other residence

These regular visits to the other property indicate the employee has retained the necessary connection with the other property for it to be his or her usual place of residence.

Therefore, the relevant provision to consider in relation to scenario 8 is subsection 47(5) of the FBTAA.

Is the accommodation provided to the employee in scenario 9 the employee's usual place of residence?

In scenario 9:

· the employee has another residence

· the term of employment is ongoing, rather than for a fixed term

· the employee's family resides at the other residence, and

· the employee regularly returns to the other residence

Given the employee's family has remained at the other residence to which the employee regularly returns it can be concluded that the employee is living away from his or her usual place of residence. This conclusion is in accordance with paragraph 43 of MT 2030 which states in part:

To illustrate the point, an employee who lives during the working week in the country town where his permanent job is located but who travels perhaps several hundred kilometres to live during weekends with his wife and children in the family home located in another town would be, during the week, living away from home.

Therefore, the relevant provision to consider in relation to scenario 9 is subsection 47(5) of the FBTAA.

Is the accommodation provided to the employee in scenario 10 the employee's usual place of residence?

The situation in scenario 10 is similar to scenario 9 except the employee does not return to visit the family at the other residence. Although as discussed in relation to scenario 9 the fact the employee's family resides at the other residence provides a link to the other residence this by itself will not make it the usual place of residence.

In 3 T.B.R.D. Case C6, an employee whose home was in Melbourne took up his appointment as the company's branch manager in Sydney. As at that time the employee was advised not to make a complete break with Melbourne. After a year the employee's appointment was confirmed as permanent and he began looking for a house in which to establish a home for his wife and family. His wife and family continued to live in Melbourne for a further ten months.

In considering whether the employee was living away from his usual place of abode Mr. Cotes (Member) said at paragraph 62:

But, despite all this, it is not easy to see how a taxpayer can be held to live away from his usual place of abode if the employment which keeps him away from what is claimed to be such is of a permanent and not of a temporary nature and if the position is such that, not only can there be no intention on the part of the taxpayer to return permanently to dwell there, but the distance is such that his periods of sojourn there are of brief duration and at infrequent intervals. If, in these circumstances, a taxpayer continues to maintain a home away from the locality of his employment, even if his wife and family continue to reside there, I find difficulty in regarding that home as the taxpayer's usual place of abode.'

In this case the decision was dependent upon a conclusion that the employee did not intend to return, except for brief periods to Melbourne.

The situation of the employee in scenario 10 can be contrasted to the decision in this case if the employee's family do not intend to reside in the on-site accommodation and the employee intends to return to live with the family in the other residence.

In such a scenario, the employee will be living away from their usual place of residence and the relevant provision to consider will be subsection 47(5) of the FBTAA.

Will the accommodation provided in scenarios 1, 8, 9 and 10 be an exempt benefit under subsection 47(5) of the FBTAA?

As set out above, the provision of accommodation will be an exempt benefit under subsection 47(5) of the FBTAA when the following conditions are satisfied:

1. the benefit is a residual benefit consisting of the provision of accommodation;

2. the accommodation is provided as the employee is required to live away from their usual place of residence;

3. the employee is not travelling while performing their employment duties; and

4. the employee provides a declaration in the approved form.

If the employee provides a declaration in the approved form each of these conditions will be satisfied in scenarios 1, 8, 9 and 10 as the employee is required to live away from his or her usual place of residence in order to perform his or her duties of employment.

Will the accommodation provided in scenarios 2,3, 4, 5, 6 and 7 be an exempt benefit under section 58ZC of the FBTAA?

As set out above, the provision of accommodation will be an exempt benefit under section 58ZC of the FBTAA when the following conditions are satisfied:

(1) employee is provided with a housing benefit

(2) the unit of accommodation is located in a remote area

(3) for the whole of the tenancy period the unit of accommodation is occupied by the employee who's usual place of employment is in a remote area

(4) one of the following three conditions are met:

a. the nature of your business is such that employees are liable to move frequently from one residential location to another, or

b. there is insufficient suitable residential accommodation otherwise available at or near the place or places where the employees are employed, or

c. it is customary for employers in that industry to provide free or subsidised accommodation for employees.

Although the relevant benefit in each of the scenarios is a housing benefit, the on-site accommodation provided in scenarios 4, 5, 6 and 7 will not be an exempt benefit under 58ZC of the FBTAA as the accommodation is not located in a remote area.

Are the other conditions satisfied for scenarios 2 and 3?

Was the employee's usual place of employment in a remote area during the period the employee occupied the unit of accommodation?

This condition will be satisfied as the usual place of employment is the same as the usual place of residence which is in a remote area.

Are one of the three conditions satisfied?

In relation to the third condition Taxation Determination TD 94/97 Fringe benefits tax: What does the phrase 'customary for employees in the industry' mean in relation to the provision of fringe benefits to employees? states at paragraph 2:

A benefit will be accepted as being customary where it is normal or common for employees of that class or job description in that industry to be provided with the same or similar benefits. It is not necessary that all or even the majority of employees in the industry receive the benefit. Where the provision of the benefit is unique, rare or unusual within an industry it would not be accepted as being customary.

The provision of the accommodation is governed by an agreement with various clients which requires the employee to be on-site 24 hours a day. As this agreement is a standard agreement within your industry it is accepted that the provision of free or subsidised accommodation is customary within your industry.

Therefore, the accommodation provided to the employees in scenarios 2 and 3 will be an exempt benefit under subsection 58ZC(1) of the FBTAA.

Are employees who move from one location to another considered to be living away from their usual place of residence?

You have advised that some employees at the expiration of their duties at one location are offered a position at another location. This offer is made to those employees you would like to retain. The conditions of employment are the same as for all employees.

Guidance on whether employees who have a career from moving from one location to another is provided at paragraph 25 of MT 2030 which states:

On the other hand, certain kinds of occupations have a career structure which brings with it the necessity to accept regular transfers from one location to another, e.g., police officers, school teachers, members of the defence force, bank employees etc. Employees in these situations will generally not be treated as living away from home when they move on transfer to live in proximity to the current work place. That will be the case even if the employee owns a home elsewhere in which he or she eventually intends to reside.

In applying this paragraph it can be concluded that the usual place of residence of an employee who moves from one location to another will be the on-site accommodation regardless of whether their family resides at another residence, or they regularly return to the other residence. Therefore, the only exemption that can apply to these employees is the exemption in section 58ZC of the FBTAA.