The AAT has found that a scheme was implemented by a taxpayer differently from the scheme described in a private ruling and that therefore the Commissioner was no longer bound by it and was authorised to issue the taxpayer with FBT assessments for the relevant years.
- The taxpayer owned 50% of a property, which contained a home. The taxpayer’s directors (a husband and wife couple at the relevant times) owned the other 50% as tenants in common.
- In 2009, the taxpayer obtained a private ruling, which specified a scheme in which the property was used 50% by the business and therefore there was no housing fringe benefit.
- After an audit in 2012, the Commissioner issued FBT assessments for the tax periods ended 31 March 2007, 2008 and 2009. The Commissioner decided the “business use” of the home was 34% (later decreased to 20% with amended FBT assessments issued).
The Tribunal found that, based on the totality of the facts and evidence before it, the taxpayer implemented the scheme differently to the scheme set out in the private ruling (and in the private ruling application). As a result, the Commissioner was not bound by it and was authorised to issue the FBT assessments.
The Tribunal also considered that less than 50% of the home had a “business use”, not all of the identified “business use areas” were used exclusively or almost exclusively by the taxpayer to carry on its business and produce assessable income, and not all of the identified “business use areas” exhibited the defining characteristics of a place of business. In conclusion, the Tribunal held the taxpayer had not proved, on the balance of probabilities, that the FBT assessments were excessive. Accordingly, the Tribunal affirmed the Commissioner’s decision.
(AAT Case [2013] AATA 566, AAT, Ref Nos: 2011/2665, 2011/2666, 2011/2667, 2011/2668, Walsh SM, 2 August 2013.)
[LTN 158, 16/8/13]