ATO ID 2010/151: Property fringe benefit: money - tangible or intangible property
Date of decision: 2 July 2010
Year of income: Year ended 31 March 2011
Business line: Superannuation and Employer Obligations

Issue
Can a payment of money constitute the provision of 'tangible property' as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Decision
No. Although money is property for the purposes of the FBTAA, it does not meet the definition of 'tangible property' under subsection 136(1) of the FBTAA. Money will however satisfy the definition of 'intangible property' under subsection 136(1) of the FBTAA.

Facts
The employer makes a payment of money to an associate of an employee in respect of the employment of the employee. The money is in a form that is used in the ordinary course of business, that is, a medium of exchange. The payment does not constitute 'salary or wages' as defined in subsection 136(1) of the FBTAA. The payment of money represents a 'benefit' as defined in subsection 136(1) of the FBTAA. Money is 'property' as defined in subsection 136(1) of the FBTAA.

Reasons for decision
Summary: 'Property' is defined in subsection 136(1) of the FBTAA as meaning: intangible property; and tangible property. While money is property for the purposes of the FBTAA, it must be determined whether money is intangible property or tangible property for the purposes of the definition of 'property'. 'Tangible property' is defined in subsection 136(1) of the FBTAA as meaning: goods and includes: (a) animals, including fish; and (b) gas and electricity. There is no definition of 'goods' in the FBTAA. While money is property it is not generally considered as 'goods' ( Miller v. Race (1758) 1 Burr 452; Sale of Goods Act 1923 (NSW), section 5; Goods Act 1958 (Vic), section 3; Sale of Goods Act 1896 (Qld), section 3; The Sale of Goods Act 1895 (WA), section 60; etcetera). Further, paragraphs (a) and (b) of the definition of tangible property do not apply to money. Therefore, money will not satisfy the definition of 'tangible property' in subsection 136(1) of the FBTAA. 'Intangible property' is defined in subsection 136(1) of the FBTAA as meaning: As money is property and it is not tangible property, money will come within paragraph (c) of the definition of intangible property as 'any other kind of property other than tangible property'. The two exclusions at paragraphs (d) and (e) have no application to property in the form of money. It might be considered that there is an alternative view as expressed in the decision in Walstern v. Commissioner of Taxation (2003) 138 FCR 1; 2003 ATC 5076; (2003) 54 ATR 423 where Hill J stated at FCR 23; ATC 5092; ATR 441: It follows in my mind that at the time of allocation there was the provision of property, namely the benefit in the trust fund constituted by the money which was tangible property, so that there was a property benefit as defined in the FBTA Act. ... However, it is not considered that the use of the words 'tangible property' by Hill J above was in the context of the definition of 'tangible property' in subsection 136(1) of the FBTAA. Rather it was the use of the words in their ordinary sense; that is, capable of being touched, or real or actual. Although money is property for the purposes of the FBTAA, it does not meet the definition of 'tangible property' under subsection 136(1) of the FBTAA. Money will however satisfy the definition of 'intangible property' under subsection 136(1) of the FBTAA.

Legislative references: Fringe Benefits Tax Assessment Act (1986) subsection 136(1)
Case references: Walstern v Commissioner of Taxation (2003)138 FCR 1 2003 ATC 5076 (2003) 54 ATR 423
Related ATO interpretative decisions: ATO ID 2007/204
Subject references: Fringe benefits tax Fringe benefits Property fringe benefits FBT intangible property FBT tangible property