Issue
Is the provision of an investment related service, an in-house residual fringe benefit as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
Yes. The provision of an investment related service is an in-house residual fringe benefit as defined in subsection 136(1) of the FBTAA.
Facts
The employer operates in the financial services industry and provides a range of investment related services to its customers, including insurance administration and brokerage services.
As a consequence of the employment of the employee, the employer provides the employee with a particular investment related service, a service that the employer normally provides to its customers as part of its business.
Reasons for Decision
The benefit provided by the employer is provided in respect of the employment of the employee and is a 'fringe benefit' as defined in subsection 136(1) of the FBTAA.
The benefit does not fall within any of the categories of benefits covered by Subdivision A of Divisions 2 to 11 (inclusive) of Part III of the FBTAA, for example, car benefits and loan benefits. Because of this the benefit is a 'residual benefit' as defined in subsection 136(1) of the FBTAA. Note: the 'residual benefit' category normally applies to 'services' type benefits.
'Residual fringe benefit' as defined in subsection 136(1) of the FBTAA, means a 'fringe benefit' that is a 'residual benefit'. The investment related service is a 'residual fringe benefit'.
The term 'in-house residual fringe benefit' is defined in subsection 136(1) of the FBTAA. Subsection 136(1) of the FBTAA requires that the benefit is a 'residual fringe benefit'; that the provider of the benefit is the employer (or associate of the employer); that at the time the benefit was provided the provider carried on a business that includes the provision of identical or similar benefits principally to outsiders; but does not include a benefit provided under a contract of investment insurance.
The provision of the investment related service by the employer to the employee is a residual fringe benefit; the employer was providing the same service to its customers at the time the benefit was provided; the benefit is not a benefit provided under a contract of investment insurance. The benefit is therefore an in-house residual fringe benefit.