11 May 2004

Fringe Benefits Tax - Exemptions And Reporting Exclusions

The Government will extend the range of fringe benefits tax (FBT) exemptions and FBT reporting exclusions, the Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, announced today.

These changes will: remove anomalies in the FBT exemption for relocation benefits for employees; ensure that the FBT treatment of benefits under the new Military Rehabilitation and Compensation Scheme is consistent with the treatment of benefits under the earlier scheme; and extend the range of FBT reporting exemptions available to police officers and defence force personnel.

Relocation benefits

The Government will extend the FBT exemption for benefits provided to employees who are relocated by their employer, for instance, as a result of a transfer or posting, with effect from 1 April 2004.

Currently, an FBT exemption is available where the employer pays for costs associated with the sale or acquisition of a dwelling by a relocated employee, as long as the sale is made within two years, and the purchase within four years, of the new employment commencement date. However, the purchase costs are only exempt if the sale of the old dwelling has occurred.

The changes will retain the existing two and four-year limits, but will not require that the sale of the old dwelling occur before the employer accesses the exemption.

“This change will ensure that there is no disadvantage where employees who are relocated by their employer are unable to sell their old home before they purchase a home in their new location,” Senator Coonan said.

Military compensation payments

The Government will provide an FBT exemption for certain benefits provided to Commonwealth employees who are in receipt of payments under the new Military Rehabilitation and Compensation Scheme, with effect from 1 July 2004.

This ensures that recipients of payments under the new Military Rehabilitation and Compensation Scheme will have their FBT status aligned with the status of recipients of payments under the previous scheme.

“This will ensure consistent FBT treatment of benefits under each scheme,” Senator Coonan said.

For further information relating to the new Military Rehabilitation and Compensation Scheme, refer to media release VA114 of 4December2003 of the Minister for Veterans’ Affairs.

Fringe benefits reporting exclusions for police officers

The Government will provide a number of fringe benefits reporting exclusions to police officers, with effect from 1 April 2004. These reporting exclusions apply to:

  • benefits associated with conveyancing costs where police officers purchase a dwelling within four years of being transferred by the police force, whether or not they owned a dwelling at the previous locality;
  • housing benefits provided to police officers residing in housing attached to a working police station, whether or not the police officer is in a remote area;
  • rental subsidies provided to police officers in ‘regional’ areas; and
  • private travel between home and work in unmarked police cars used by police officers employed by the Australian Crime Commission and similar organisations.

“The Government is providing these fringe benefits reporting exclusions to police officers in recognition of the nature of their employment, including the need for frequent relocation,” Senator Coonan said.

Fringe benefits reporting exclusion for defence force personnel

The Government will provide a fringe benefits reporting exclusion for child tuition assistance provided to Australian Defence Force (ADF) personnel when they are relocated, where that relocation causes a need for their child to move schools.

“This reporting exclusion demonstrates the Federal Government’s commitment to recognising the unique circumstances of defence employment. It adds to a number of reporting exclusions already available for certain fringe benefits provided to ADF personnel as part of the unique circumstances of their employment,” Senator Coonan said.

Regulations giving effect to this measure were gazetted on 30 March 2004. The measure will apply retrospectively from 1 April 2003 to ensure that ADF personnel who received this type of child tuition assistance in 2003-04 can benefit from the measure.