Edited version of your private ruling

Authorisation Number: 1012512391201

Ruling

Subject: Fringe benefits tax - car benefits - home garaging.

Question 1

Is there any discretion available to the Commissioner under section 7 of the Fringe Benefits Tax Assessment Act 1986 (FBTA), to determine that a car is not available for the private use of an employee when the car is garaged or kept at or near the employee's place of residence?

Answer

No

This ruling applies for the following periods:

1 April 2013 to 31 March 2014

1 April 2014 to 31 March 2015

1 April 2015 to 31 March 2016

The scheme commences on:

1 April 2013

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

The employer, who is not an ambulance service, a fire fighting service or a police service, has a fleet of sedans which are all 'cars' in terms of the FBTAA.

The employer conducts its business from several sites;

The head office has no off-street parking and after hours parking on the street is causing some concern about the vehicles being out in the elements, theft and malicious damage.

The employer anticipates growth at all sites with an increase in its parking problems.

The employer wishes to have its employees, garage the vehicles afterhours in safe secure parking at their homes. No other personal use of the vehicles would be permitted. Any benefit to the employee is therefore incidental and of low monetary value.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 Section 7

Fringe Benefits Tax Assessment Act 1986 paragraph 7(1)(a)

Fringe Benefits Tax Assessment Act 1986 subsection 7(2A)

Fringe Benefits Tax Assessment Act 1986 subsection 7(2)

Fringe Benefits Tax Assessment Act 1986 subsection 7(3)

Fringe Benefits Tax Assessment Act 1986 subsection 7(4).

Reasons for decision

You anticipate an off street parking shortage for your fleet of cars, firstly near your head office and potentially other sites as employee numbers increase. You are proposing to allow your employees to take the fleet cars home for the specific purpose of garaging them safely rather than risk leaving the cars in off street parking where this would leave the cars open to the elements, theft and vandalism.

Under subparagraph 7(1)(a)(ii) of the FBTAA, a car benefit will arise when a car that is held by an employer is taken to be available for the private use of an employee or an associate of the employee. The availability is taken to constitute a benefit provided to the employee or associate in respect of the employee's employment.

Subsection 7(2) of the FBTAA specifically addresses the garaging of a work car at or near an employee's home and states:

7(2) Car garaged at employee's residence

Where, at a particular time, the following conditions are satisfied in relation to an employee of an employer:

(a) a car is held by a person, being:

(i) the employer;

(ii) an associate of the employer; or

(iii) a person (other than the employer or an associate of the employer) with whom, or in respect of whom, the employer or an associate of the employer has an arrangement relating to the use or availability of the car;

(b) the car is garaged or kept at or near a place of residence of the employee or of an associate of the employee;

the car shall be taken, for the purposes of this Act, to be available at that time for the private use of the employee or associate, as the case may be.

You intend to allow your employees to securely garage the fleet cars by permitting them to take the vehicles home after work. Clearly this means that the cars will be deemed for the purposes of subsection 7(2) to be available for the private use of the employees or their associates whilst the cars are so garaged.

Subsection 7(2) will not apply to a car that is used by an ambulance service, a fire fighting service or a police service that carries the stipulated characteristics of these emergency vehicles as described in subsection 7(2A). The cars used by your employees for work purposes will not be used for ambulance, fire fighting or police services and the exemption under subsection 7(2A) will not apply to the cars.

Where the car is garaged at or near the place of residence of the employee, subsection 7(2) does not provide for the Commissioner to exercise a discretion to treat the car as not available for private use even where it is due to extenuating circumstances as you have described.