Issue
For the purpose of determining whether a fringe benefit is an excluded fringe benefit as prescribed by regulation 3F of the Fringe Benefits Tax Regulations 1992 (FBTR), does the exclusion apply to the use of a motor vehicle that is not a car such as a utility truck designed to carry a load of one tonne?
Decision
No. Regulation 3F of the FBTR can only apply to car benefits. A utility truck designed to carry a load of one tonne or more does not satisfy the definition of a 'car'. Any fringe benefit which arises out of the use or availability of the utility truck is not a car benefit.
Facts
The employer of the employees owns and maintains a utility truck that is designed to carry a load of one tonne.
The employer provides its employees with the use of the utility truck.
The employees use the utility truck for both private and work related purposes.
There are fringe benefits that arise from the use, or availability, of the utility truck.
Reasons for Decision
Section 5E of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) determines the employee's individual fringe benefits amount. Excluded from the individual fringe benefits amount are excluded fringe benefits. Benefits which are prescribed for the purposes of paragraph 5E(3)(i) of the FBTAA are excluded fringe benefits.
Regulation 3F of the FBTR prescribes benefits relating to pooled or shared cars as being excluded fringe benefits for the purposes of paragraph 5E(3)(i) of the FBTAA.
Fringe benefits which are excluded fringe benefits would also not be included in the employee's reportable fringe benefits amount under Part XIB of the FBTAA.
Regulation 3F of the FBTR provides: 3F Excluded fringe benefit - pooled or shared cars (Act s 5E) (1) For paragraph 5E (3) (i) of the Act, a benefit is an excluded fringe benefit if, during a year of tax: (a) the benefit is a car benefit, as described in subsection 7 (1) of the Act, that is: (i) a fringe benefit within the meaning of subsection 136 (1) of the Act; or (ii) a benefit that: (A) is an exempt benefit; and (B) would have been a fringe benefit except that the benefit is an exempt benefit; and (b) the car benefit relates to a car the provision of which gives rise to the benefit described in paragraph (a) for more than 1 employee. Example The employer of 3 employees makes 1 car available to the employees, for private use, at different times during the year of tax. (2) The fringe benefit is an excluded fringe benefit in relation to each of those employees. (3) The fringe benefit is an excluded fringe benefit in relation to: (a) the year of tax starting on 1 April 2007; and (b) each later year of tax.
Subregulation 3F(1) of the FBTR requires the benefit to be a 'car benefit' as described in subsection 7(1) of the FBTAA. The term 'car benefit' is defined in subsection 136(1) of the FBTAA and means a benefit referred to in subsection 7(1) of the FBTAA.
Under subsection 7(1) of the FBTAA, a car benefit will arise at any time on a day in respect of the employment of an employee where a car is held by the employer and is applied to a private use by the employee or is taken to be available for the private use of the employee.
The word 'car' is defined in subsection 136(1) of the FBTAA which refers to the meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997).
Subsection 995-1(1) of the ITAA 1997 provides: car means a *motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers. motor vehicle means any motor-powered road vehicle (including a 4 wheel drive vehicle).
A utility truck that is designed to carry a load of one tonne or more is a motor vehicle but is not a car as defined. The utility truck is not a car held by the employer. Any benefit which arises out of the use or availability of the utility truck is not a car benefit as described in subsection 7(1) of the FBTAA.
As the benefit is not a car benefit, regulation 3F of the FBTR is not satisfied.
The fringe benefits reporting exclusion for pooled or shared cars is not available for benefits which arise out of the use of or availability of motor vehicles which are not cars, such as motor vehicles which carry a load of one tonne or more.