Some common sense appears to have prevailed somewhat with the
release of Taxation Determination TD 2013/4.
Moore Stephens amongst others made submissions highlighting the
fundamental flaws associated with the salary-band model first
proposed in draft Taxation Determination TD 2012/D8 in respect of
the reasonable food component.
The Australian Taxation Office ('ATO') has reverted to a
single set of rates for reasonable food and drink expenses incurred
by an employee receiving a Living Away From Home Allowance
('LAFHA') under a domestic transfer for the 2013/14 fringe
benefits tax ('FBT') year.
These new rates are effective 1 April 2013:
'Adults' for this purpose are persons who had attained
the age of 12 years before the beginning of the FBT year.
In relation to larger family groupings, the Australian Taxation
Office (ATO) accepts a food component based on the above figures
plus $117 for each additional adult and $59 for each additional
Importantly, if food and drink expenses incurred by the employee
do not exceed the reasonable amounts substantiation of these
expenses are not required.
However, it is not all good news. The net food amounts for the
2013/14 FBT year are lower than those that applied in respect of
2012/13 FBT year for the vast majority of employees.
This means that a significant number of employees who still
qualify for a LAFHA may still be facing a pay reduction as at 1
The new rates will apply unless the individual is caught by the
transitional measure (see below).
By way of comparison, TD 2012/5 which detailed the reasonable
food component for the 2012/13 FBT year commencing 1 April 2012
provided the following:
The ATO has however instituted separate rates for employees who
are living away from home at overseas locations. The applicable
rates will be dependent on the location and the size of the
accompanying family group.
For further details on the calculation of the reasonable food
and drink expenses with respect to overseas employees please refer
to the Determination, which can be found by
As a transitional measure for the FBT year commencing on 1 April
2013, where an employee and employer have an existing employment
agreement in force as at 27 February 2013 that specifies a rate in
Taxation Determination TD 2012/5 and that employment agreement is
not varied in a material way or renewed, the rates in TD 2012/5
will continue to be accepted by the Commissioner as reasonable
amounts for food and drink expenses incurred by an employee
receiving a LAFHA fringe benefit for the 2013/14 FBT year.
These transitional rules are separate from that apply in respect
of LAFHA eligibility.
Whilst the removal of the salary-band system in the final
Determination is certainly welcomed, the establishment of separate
rates for employees in overseas locations and the transitional
measures will add further confusion in navigating through the LAFHA
legislation as well as increasing the already burgeoning
administrative burden in the year ahead, perhaps to the point where
it becomes all too hard for the employers.
Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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