Fringe Benefits Tax - employer contributions to Trustee of its employee share scheme are not a fringe benefit

Are contributions made by the company taxpayer to the Trustee of its employee share scheme for the purpose of its employee share scheme not be subject to fringe benefits tax by virtue of paragraph 136(1)(hb) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Contributions made by the company taxpayer to the Trustee of its employee share scheme for the purpose of its employee share scheme are not be subject to fringe benefits tax by virtue of paragraph 136(1)(hb) of the FBTAA.

The employer has an Employee Share Scheme that complies with the provisions of Division 13A of the Income Tax Assessment Act 1936 ('ITAA 1936').

A Trustee is appointed to administer the Scheme. The employer makes irretrievable contributions to the Trustee each year. The sole activities of the Trustee are obtaining shares or rights in the employer company or a holding company of the employer, and providing those shares or rights to the employees of the employer.

The sole activities of the Trustee are the obtaining of shares or rights from the employer or a holding company of the employer and providing those shares or rights to the employees of the employer. Therefore, the contributions by the employer to the Trustee are not fringe benefits by virtue of paragraph 136(1)(hb) of the FBTAA.