ATO ID 2012/98: Exempt car benefits: excepted private use
Date of decision: 14 November 2012
Year of income: Year ending 31 March 2013
Business line: Superannuation and Employer Obligations

Issue
Where an employee's duties of employment are inherently itinerant in nature, is the transporting of the employee's family member by the employee on their journey from home to a particular work location in their employer's car, which satisfies the requirements of paragraph 8(2)(a) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), an excepted 'private use' for the purposes of paragraph 8(2)(b) of the FBTAA?

Decision
Yes. The transporting of the employee's family member is an excepted 'private use' for the purposes of paragraph 8(2)(b) of the FBTAA as the use of the car for this purpose is minor, infrequent and irregular in accordance with subparagraph 8(2)(b)(ii) of the FBTAA.

Facts
All statutory references are to the FBTAA. The employee carries out their duties of employment at varying locations and varying times. Their duties of employment are inherently itinerant in nature. The employee's unaccompanied travel in the van from home to work would be considered business travel in accordance with an application of Miscellaneous Taxation Ruling MT 2027 Fringe benefits tax : private use of cars : home to work travel . The employer provides a panel van designed to carry a load of less than one tonne to the employee. The van satisfies the requirements of paragraph 8(2)(a). The van is garaged by the employee at their home. Therefore, a car benefit arises under section 7. On one occasion in the year of tax the employee transported their child to school in the van during the employee's journey from home to one of their work locations. The transporting of the employee's family member is a 'private use' of the car for the purposes of paragraph 8(2)(b). There was no other private use.

Reasons for decision
Summary: Car benefits provided in relation to types of cars listed in paragraph 8(2)(a), such as panel vans designed to carry a load of less than one tonne, are exempt benefits if there is no private use other than excepted 'private use' for the purposes of paragraph 8(2)(b). Paragraph 8(2)(b) requires that there be no private use of the car when the benefit was provided other than: As stated in the facts, the transporting of the employee's family member is a 'private use' of the car for the purposes of paragraph 8(2)(b). As a result, it cannot be said that there has been 'no private use of the car' as required by paragraph 8(2)(b). There will need to be a consideration as to whether the private use of the car in this case falls into either of the categories of excepted private use under subparagraph 8(2)(b)(i) and subparagraph 8(2)(b)(ii). | Detailed Reasoning - Subparagraph 8(2)(b)(i) - work-related travel: The term 'work-related travel' is defined in subsection 136(1) as follows: work-related travel , in relation to an employee, means: (a) travel by the employee between: (i) the place of residence of the employee; and (ii) the place of employment of the employee or any other place from which or at which the employee performs duties of his or her employment; or The words 'travel by the employee' in paragraph (a) of the definition of 'work-related travel' in subsection 136(1) make it clear that the paragraph only applies to the employee's travel between home and a work location. Similarly, the words 'travel by the employee' in paragraph (b) of the definition of 'work-related travel' in subsection 136(1) make it clear that the paragraph only applies to the employee's travel that is incidental to travel in the course of performing their employment duties. Travel by someone other than the employee, such as travel by a member of the employee's family, is not the type of travel which falls into either paragraph (a) or (b) of the definition of 'work-related travel' in subsection 136(1). Therefore, the travel by the employee's child in this case does not meet the definition of 'work-related travel'. Accordingly, the transportation of the employee's child to school by the employee on their way to a work location is not work-related travel for the purposes of subparagraph 8(2)(b)(i). In these circumstances, subparagraph 8(2)(b)(i) does not except the private use of the car by the employee. | Detailed Reasoning - Subparagraph 8(2)(b)(ii) - minor, infrequent and irregular private use: The FBTAA does not specify what is meant by the terms 'minor', 'infrequent' and 'irregular' in relation to private use and, therefore, each of those terms will take their ordinary meaning in the context in which they are used. The Macquarie Dictionary 2009, rev. 5th edn, The Macquarie Library Pty Ltd, NSW provides the following definitions for each of the terms: minor adjective 1. lesser, as in size, extent, or importance... infrequent adjective 1. happening or occurring at long intervals or not often... 2. not constant, habitual, or regular... irregular adjective not characterised by any fixed principle, method, or rate: irregular intervals For the purposes of subparagraph 8(2)(b)(ii) all three of the conditions must be satisfied. The transportation of the employee's child to school during the employee's journey from home to a work location was a one-off occasion and there was no other private use of the car. In these circumstances, the transporting of the employee's family member is an excepted 'private use' for the purposes of subparagraph 8(2)(b)(ii) as the use of the car for this purpose is minor, infrequent and irregular.

Legislative references: Fringe Benefits Tax Assessment Act 1986 section 7 paragraph 8(2)(a) paragraph 8(2)(b) subparagraph 8(2)(b)(i) subparagraph 8(2)(b)(ii) subsection 136(1)
Related public rulings and determinations: Miscellaneous Taxation Ruling MT 2027
Related ATO interpretative decisions: ATO ID 2012/96 | ATO ID 2012/97
Other references: Macquarie Dictionary 2009, rev. 5th edn, The Macquarie Library Pty Ltd, NSW
Subject references: Fringe benefits tax Exempt car benefits Car fringe benefits FBT exempt private use FBT home to work travel