ATO ID 2004/852: Car fringe benefits: statutory formula method - places of residence and available for private use
Date of decision: 25 October 2004
Year of income: Year ended 31 March 2005
Business line: Superannuation and Employer Obligations

Issue
Where an employee is provided with the use of a car by their employer and, as a result of employment duties, the car is parked overnight at or near the employee's temporary motel, hotel or similar type of accommodation, will the car be taken to be available for private use under subsection 7(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Decision
Yes. A car parked overnight by an employee under such circumstances is considered to be 'garaged or kept at or near a place of residence' and thus available for private use under subsection 7(2) of the FBTAA.

Facts
The employee has been provided with the use of a car by their employer. The employer uses the statutory formula method for calculating the taxable value of car fringe benefits. The car is generally garaged or kept overnight at the employee's home. The employee uses the car for the purposes of both private and business travel. When using the car for business travel, the employee is required to occasionally be away from home overnight. When this occurs, the employee parks the car at or near a motel, which is temporary accommodation.

Reasons for decision
Summary: Under paragraph 7(1)(a) of the FBTAA, a car benefit will arise at any time of day in respect of the employment of the employee where a car held by the provider is either: In accordance with paragraph 7(2)(b) of the FBTAA, a car shall be taken to be available for private use where it is garaged or kept at or near a place of residence of the employee or an associate of the employee, for the purposes of subparagraph 7(1)(a)(ii) of the FBTAA. Subsection 136(1) of the FBTAA defines a 'place of residence' as: Accommodation in the form of a motel or hotel room is 'sleeping accommodation' that is used on a temporary basis. Therefore, where the car is parked overnight at or near such temporary accommodation, this will constitute days on which the car is available for private use of the employee.

Legislative references: Fringe Benefits Tax Assessment Act 1986 paragraph 7(1)(a) subparagraph 7(1)(a)(ii) subsection 7(2) paragraph 7(2)(b) subsection 136(1)
Related public rulings and determinations: Taxation Determination TD 94/16
Related ATO interpretative decisions: ATO ID 2003/613
Subject references: Fringe benefits tax Fringe benefits Car fringe benefits FBT car FBT statutory formula