ATO Interpretative Decision
ATO ID 2005/314 (Withdrawn)
Assessable income: Offshore oil and gas rig workers and hard lying allowance
FOI status: may be released
||This ATO ID is withdrawn. The view contained in the ATO ID represents a straight application of the law. Guidance relating to the issue is included in Employment income (QC 31914).
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 22 September 2017.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Is a hard lying allowance paid to the taxpayer, an offshore oil and gas rig worker, assessable income under section 15-2 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Yes. A hard lying allowance paid to the taxpayer, an offshore oil and gas rig worker, is assessable income under section 15-2 of the ITAA 1997.
The taxpayer is employed as an offshore oil and gas rig worker on a self-propelled rig.
Under a workplace agreement the taxpayer is paid a hard lying allowance.
The hard lying allowance is paid by the employer having regard to the accommodation and recreation facilities and all other conditions associated with living on board a self-propelled drilling vessel.
On the taxpayer's fortnightly payslip, the payment of the hard lying allowance is shown as 'hard lying' or 'hard lying allowance'.
The allowance is not expressed to be paid as a living-away-from-home allowance (LAFHA).
Reasons for Decision
Subsection 15-2(1) of the ITAA 1997 provides that the assessable income of a taxpayer includes the value of allowances paid in respect of employment. However the value of an allowance will not be included in the assessable income of a taxpayer if the allowance is a fringe benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).
If the hard lying allowance paid is properly characterised as a living-away-from-home allowance, the hard lying allowance will be a fringe benefit within the meaning of subsection 30(1) of the FBTAA. Fringe benefits are non-assessable non-exempt income in the hands of the taxpayer under subsection 23L(1) of the Income Tax Assessment Act 1936 (ITAA 1936).
Subsection 30(1) of the FBTAA requires that a whole or part of the allowance be in the nature of compensation for additional expenses, refer Atwood Oceanics Australia Pty Ltd v. Federal Commissioner of Taxation 89 ATC 4808; (1989) 20 ATR 742. The hard lying allowance is not of this nature and subsection 30(1) of the FBTAA is not satisfied.
Paragraph 30(2)(d) of the FBTAA requires that 'the allowance is expressed to be paid as a living-away-from-home allowance'.
The Macquarie Dictionary , [Multimedia], version 5.0.0, 1/10/01. defines 'express' as:
8. clearly indicated; distinctly stated (rather than implied); definite; explicit; plain.
Under the workplace agreement and on the payslip, the allowance is shown as 'hard lying allowance' or 'hard lying'.
Accordingly, the allowance is not expressed to be paid as a LAFHA for the purposes of paragraph 30(2)(d) and that condition in subsection 30(2) of the FBTAA is not satisfied. The hard lying allowance is not a fringe benefit for the purposes of the FBTAA and is not non-assessable non-exempt income under subsection 23L(1) of the ITAA 1936.
Therefore, the hard lying allowance paid to the taxpayer, an offshore oil and gas rig worker, is assessable income of the taxpayer under section 15-2 of the ITAA 1997.
Note: in Best v. Federal Commissioner of Taxation  AATA 560; 2005 ATC 2184; (2005) 59 ATR 1151 and Crane v. Federal Commissioner of Taxation  AATA 872; 2005 ATC 2312; (2005) 60 ATR 1170, it was held, by differently constituted Administrative Appeals Tribunals, that a hard lying allowance paid to a taxpayer was not a LAFHA benefit under section 30 of the FBTAA and was not income derived by the taxpayer by way of the provision of a fringe benefit.
|Date of amendment
|12 September 2014
|20 June 2014
||Reasons for Decision
||Updated formatting and reference to FBTAA in the second paragraph.
||Insert references to FBT.
|13 June 2014
||Issue and Decision
||Updated legislative references.
||Reasons for Decision
||Updated and included additional legislative references and included additional explanation to improve clarity.
||Updated references to remove repealed provision and substitute current provisions.
||Case references and Other references
||Updated to correct error; Inserted reference to the Macquarie Dictionary.
Date of decision: 15 September 2005
|Year of income:||Year ended 30 June 2005|
Income Tax Assessment Act 1997
Income Tax Assessment Act 1936
Fringe Benefits Tax Assessment Act 1986
Atwood Oceanics Australia Pty Ltd v. Federal Commissioner of Taxation
89 ATC 4808
(1989) 20 ATR 742
Best v. Federal Commissioner of Taxation
 AATA 560
(2005) 59 ATR 1151
2005 ATC 2184
Crane v. Federal Commissioner of Taxation
 AATA 872
2005 ATC 2312
(2005) 60 ATR 1170
Related ATO Interpretative Decisions
ATO ID 2002/232
ATO ID 2004/706
The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01
Living away from home allowances
Salary & wages income
Siebel/TDMS Reference Number: 4831125; 1-58KQ81Z
Business Line: Small Business/Individual Taxpayers
Date of publication: 18 November 2005