ATO Interpretative Decision
ATO ID 2005/158
Fringe Benefits Tax
Exempt Benefits: remote area housing and water
FOI status: may be released
Status of this decision: Decision Current
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Where an employer provides an employee with a remote area housing benefit, that is an exempt benefit under section 58ZC of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), will the provision of water as agreed under a residential tenancy agreement constitute part of the exempt benefit?
Yes. The provision of water to the employee as agreed under a residential tenancy agreement is part of the remote area housing benefit which is exempt under section 58ZC of the FBTAA.
The employer provides housing to an employee.
The housing is provided to an employee in a remote area.
The employee signed a residential tenancy agreement with the employer.
Under a clause in the residential tenancy agreement the employer agreed to provide the employee with free water in connection with the accommodation provided to the employee as part of the agreement.
Reasons for Decision
Section 58ZC of the FBTAA provides that a housing benefit that is a remote area housing benefit is an exempt benefit.
Section 25 of the FBTAA provides that a 'housing benefit' arises where a 'housing right' is granted by one person to another person.
A 'housing right' is in turn defined in subsection 136(1) of the FBTAA as:
in relation to a person, means 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.
Where water is provided to an employee in accordance with a residential tenancy agreement between the employer and the employee, the water will form part of the 'housing right' that is granted under the same agreement.
Unlike electricity or gas, water is not 'residential fuel' as defined under subsection 136(1) of the FBTAA. As such section 59 of the FBTAA does not apply to the provision of water.
Accordingly, the provision of water to the employee is part of the remote area housing benefit which is exempt under section 58ZC of the FBTAA.
Date of decision: 9 June 2005
|Year of income:||Year ended 31 March 2006|
Fringe Benefits Tax Assessment Act 1986
Related ATO Interpretative Decisions
ATO ID 2004/276
FBT exempt housing benefit
FBT remote area housing
Fringe benefits tax
Housing fringe benefits
Date of publication: 10 June 2005