Private ruling: Division 7A marriage break-up
Published: August 2013
Ruling period: Income year ending 30 June 2014 | Income year ending 30 June 2015
Date scheme commenced: The scheme will commence at the time the final agreement is reached between the parties in regard to the property settlement.

Ruling: Q1: Does section 109J of the ITAA 1936 apply to a Family Court order under section 79 of the Family Law Act 1975 (FLA 1975) that directs the company to transfer an amount in cash to the taxpayer? | A1: No. | Q2: Will the taxpayer be taken to have received a deemed dividend pursuant to section 109C of the ITAA 1936 in respect of the payment by the company to them, of cash, pursuant to Family Court orders under section 79 of the FLA 1975? | A2: Yes. | Q3: Will this cash payment to the taxpayer be a dividend for the purposes of subsection 6(1) of the ITAA 1936? | A3: Yes, section 109C of the ITAA 1936 operates such that the company is taken to pay a dividend to the taxpayer. | Q4: Will the cash payment to the taxpayer be statutory income under subsection 44(1) of the ITAA 1936? | A4: Yes, section 109Z of the ITAA 1936 provides that the cash payment (to the extent it is a dividend under Division 7A of the ITAA 1936) is taken for the purposes of the ITAA 1936 to be paid to you as a shareholder in the company and out of profits of the company. | Q5: Does section 109J of the ITAA 1936 apply to a Family Court order under section 79 of the FLA 1975 that directs a company to transfer assets to the taxpayer? | A5: No, section 109J of the ITAA 1936 does not prevent the transfer of the assets to the taxpayer from being treated as a dividend under section 109C(1) of the ITAA 1936. | Q6: Will the taxpayer be taken to have received a deemed dividend pursuant to section 109C of the ITAA 1936 in respect of the transfer of the assets pursuant to Family Court orders under section 79 of the FLA 1975? | A6: No. Whilst the transfer of the assets constitutes a 'payment' for the purposes of paragraph 109C(3)(c) of the ITAA 1936, that 'payment' will be converted to a loan before the private company's lodgement day. As a payment that is converted to a loan before lodgement day, subsection 109D(4A) of the ITAA 1936 provides that the payment should be treated as a loan at the time the payment is made, for the purposes of Division 7A of the ITAA 1936. | Q7: Will this transfer of the assets to the taxpayer be a dividend for the purposes of subsection 6(1) of the ITAA 1936? | A7: No. The transfer of the property and motor vehicle, which is treated as a loan under subsection 109D(4A) of the ITAA 1936 will not constitute a dividend for the purposes of subsection 6(1) of the ITAA 1936. | Q8: Will this transfer of the assets to the taxpayer be statutory income under subsection 44(1) of the ITAA 1936? | A8: No. | Q9: Will section 109L of the ITAA 1936 apply in regard to either the proposed transfer of cash or the assets to the taxpayer? | A9: No. | Q10: If the answer to any of the questions above is 'Yes', will it make a difference if taxpayer and current spouse were divorced prior to the payments and transfers occurring? | A10: No. | Q11: If the answer to any of the questions above is No, will it make a difference if that taxpayer was still employed by the company, after the payments and transfers occurring? | A11: No

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. The taxpayer and their spouse were married but due to a breakdown in their relationship they have separated. They are not divorced but are currently in the process of settling their matrimonial affairs. The taxpayer spouse is currently the sole director of company Pty Ltd (the company). They each own equal shares in the company. The taxpayer is a resident of Australia. Subject to the Family Court's approval the taxpayer and their spouse will seek the following proposed consent orders to be made by the Family Court under the Family Law Act as part of the divorce settlement, as relates to the company: · The company is to become a party to the settlement as a second respondent; · The taxpayer is to transfer the shares they owns in the company to their spouse; · The company is to pay a significant sum of cash to the taxpayer after the shares are transferred. The company may be required to borrow the money in order to facilitate this payment · The company is also to transfer other assets to the taxpayer after the shares are transferred (this transfer of the other assets to the taxpayer will then be converted to a loan pursuant to and for the purposes of subsection 109D(4A) of the UTAA 1936 i.e. it will be converted before the end of the company's lodgement day for the year of income) · The taxpayer will fully repay the company for any loan that may arise as the result of the Division 7A provisions applying to the above non-cash transactions (i.e. the assets) on or before the company's lodgement day, for the year of income in which they (i.e. the assets) are transferred. The taxpayer may be required to borrow the money in order to facilitate this loan repayment. The company will have a distributable surplus pursuant to subsection 109Y(2) of the ITAA 1936. The sum of all the dividends the company is taken under Division 7A of the ITAA 1936 to have paid at the end of the year of income for the year of income in which the cash, and the assets is transferred, will not be more than the company's distributable surplus for that year. The taxpayer and their spouse have children which live with the taxpayer at the property owned by the company. The taxpayer pays rent to the company. The taxpayer is currently employed by the company, this employment will cease prior to the time when the property settlement has been finalised and the proposed payments/transfers made.

Relevant legislative provisions: Income Tax Assessment Act 1936 6(1), | Income Tax Assessment Act 1936 44(1), | Income Tax Assessment Act 1936 109C | Income Tax Assessment Act 1936 109D | Income Tax Assessment Act 1936 109D(4A) | Income Tax Assessment Act 1936 109J, and | Income Tax Assessment Act 1936 109L

Reasons for decision: Summary: Where an order is made against under section 79 of the Family Law Act 1975 (FLA 1975) and that order requires a private company to make a payment to a party to the matrimonial proceedings who is an associate of a shareholder of the private company, the subsequent payment in conformance with the order is a payment for the purposes of paragraph 109C(3)(a) of the ITAA 1936. Section 109J of the ITAA 1936 does not prevent the payment from being treated as a dividend under subsection 109C(1) of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: Section 109J of Subdivision D of Division 7A reads as follows: 109J PAYMENTS DISCHARGING PECUNIARY OBLIGATIONS NOT TREATED AS DIVIDENDS A private company is not taken under section 109C to pay a dividend because of the payment of an amount, to the extent that the payment: (a) discharges an obligation of the private company to pay money to the entity; and (b) is not more than would have been required to discharge the obligation had the private company and entity been dealing with each other at arm's length. An order of the Family Court under section 79 of the FLA 1975 for a private company to pay money to an associate of a shareholder imposes a binding requirement in law for the payment to be made. This type of obligation is "an obligation of the private company to pay money to an entity" in terms of paragraph 109J(a) of the ITAA 1936. However, both paragraphs 109J(a) and 109J(b) of the ITAA 1936 require satisfaction for the section to be enlivened so as to prevent a deemed dividend from arising under section 109C of the ITAA 1936. Paragraph 109J(b) of the ITAA 1936 requires consideration of whether the payment made is more than would be required to discharge the obligation had the private company and shareholder (or their associate) been dealing at arm's length. Paragraph 109J(b) of the ITAA 1936 therefore requires a testing of both the nature and extent of the underlying obligation as well as the payment. That is, a consideration of what would have been the payment had the parties been dealing with each other at arm's length (as paragraph 109J(b) directs us to do), necessarily involves an enquiry as to what would have been the obligation agreed between such parties. The meaning of arm's length is well settled. In The Trustee for the Estate of the late AW Furse No 5 Will Trust v. FC of T 91 ATC 4007; Hill J, in relation to the expression "not dealing with each other at arm's length" for the purposes of subsection 102AG(3) of the ITAA 1936, said: "What is required in determining whether parties dealt with each other in respect of a particular dealing at arm's length is an assessment whether in respect of that dealing they dealt with each other as arm's length parties would normally do, so that the outcome of their dealing is a matter of real bargaining." Further , in Granby Pty Ltd v FC of T 95 ATC 4240; 30ATR 400, Lee J said in the context of the former paragraph 160ZH(9)(c) of the ITAA 1936 that the phrase 'at arm's length' means: "at least, that the parties to a transaction have acted severally and independently in forming their bargain". It follows that if the parties are acting severally and independently in forming their bargain that each must be bargaining in their respective best interests. In the present context, the testing in paragraph 109J(b) of the ITAA 1936 is concerned with what pecuniary obligation would have arisen had the matrimonial parties and the private company been dealing with each other at arm's length. The "arm's length" requirement will thus require an alternate hypothesis in which the private company is engaged in a 'dealing' and pursuing its own best interests. The alternative postulate takes us outside of a family law context. Firstly, the private company may only be subject to an order under section 79 of the FLA 1975 because it is not at arm's length to one or more of the matrimonial parties. Secondly, a matrimonial cause before the Family Court does not involve any 'dealing' or 'bargaining' between the parties to the proceedings. The Court must always exercise its own discretion on whether to make an order, and, if so what orders to make. This is so even if orders are sought by consent. This is consistent with the extrinsic materials which make it clear that what was in contemplation is what would have arisen between the parties in a commercial setting. The Explanatory Memorandum expressly states: An amount paid to discharge a pecuniary obligation owed by a private company to a shareholder or associate will not be treated as a dividend to the extent that the payment is not more than the amount the pecuniary obligation would have been if the private company and shareholder or associate had been dealing with each other at arm's length [new section 109J] This section ensures that such commercial dealings are not unfairly taxed …….. (emphasis added) As a practical matter, the alternate hypothesis must proceed on the basis the private company is acting in accordance with law, whether that be in terms of its own governing constituent documents or the Corporations Act 2001. In terms of the Corporations Act 2001 , section 182 expressly prohibits officers or employees of a company from improperly using their position to gain an advantage for any other person or cause a detriment to the company. In the present context the question which arises is whether a company would subject itself to an obligation to make a payment to a non-shareholder but for the Family Law context and if so, what would be the quantum of that obligation. In terms of a dealing between a private company and a non-shareholder in a commercial setting, the private company may be incapable of making a payment representing the net assets of the company, being an appropriation of profits, directly to a non-shareholder. Such an appropriation may be in breach of sections 181 or 182 of the Corporations Act 2001 and/or in breach of the director's fiduciary duty not to misuse company funds. In a commercial setting, for a private company to make a payment to a non-shareholder, the payment would ordinarily need to be in consideration for something of value provided in return by the non-shareholder. One possible circumstance in which a private company might make an appropriation of profits to a non-shareholder for nil consideration would be where the private company is empowered to make a gratuitous payment to the non-shareholder. Even were a private company empowered to make a gratuitous payment, this is not of assistance in terms of the testing required by paragraph 109J(b) of the ITAA 1936. The essence of a gift is a voluntary appropriation of cash or property to a donee. A gift involves no imposition of any obligation on the donor or any discharge of an obligation in the making of the gift. A private company which makes a gratuitous payment to a non-shareholder is therefore not discharging any obligation in making the payment. A payment made in conformance with a Court order pursuant to section 79 of the FLA 1975 can therefore not be tested against a gratuitous payment for the purposes of paragraph 109J(b) of the ITAA 1936. In view of the foregoing, the Commissioner considers there is no identifiable alternate hypothesis under which a private company might make an appropriation of profits to a non-shareholder in discharge of an obligation in an arm's length dealing as required by the testing in paragraph 109J(b) of the ITAA 1936. Therefore, section 109J of the ITAA 1936 cannot apply to prevent a payment made in conformance with an order of the Family Court under section 79 of the FLA 1975 from being treated as a deemed dividend under section 109C of the ITAA 1936. This conclusion also accords with the policy intent evident in paragraph 1.44 of the Explanatory Memorandum to Taxation Laws Amendment Bill (No. 3) 2005 which inserted section 109RC of the ITAA 1936 which makes it clear such payments are intended to be assessable as dividends. The paragraph relevantly states: "Under the current law, transfers of property and other 'payments' in respect of marriage or relationship breakdown are caught by Division 7A even though they may be non-voluntary (e.g. by court order)." [paragraph 1.44]. "The amendment provides that deemed dividends arising from 'payments' in respect of marriage or relationship breakdowns, may be frankable by the company ..." [paragraph 1.45]. "While these payments could be completely removed from being caught by Division 7A this would arguably be providing a tax benefit to these taxpayers which is not the intention of these provisions." [paragraph 1.99]." | Summary: Section 109C of the ITAA 1936 will apply when the company makes a cash payment pursuant to a Family Court order under section 79 of the FLA 1975, to the taxpayer. | Detailed Reasoning - Detailed reasoning: Division 7A of Part III of the ITAA 1936 is directed at ensuring that disguised or informal distributions of private company profits to shareholders or their associates are included in the assessable income of the shareholder or associate. Under subsection 109C(1) of the ITAA 1936 where a private company pays an amount to an entity during the year, that payment is deemed to be a dividend where either: a) the payment is made when the entity is a shareholder in the private company or an associate of such a shareholder, or b) a reasonable person would conclude (having regard to all the circumstances) that the payment is made because the entity has been such a shareholder or associate at some time. Section 109ZD of the ITAA 1936 states that 'associate' has the meaning given by section 318 of the ITAA 1936. Section 318 includes a relative as an associate. A relative includes a spouse (subsection 995-1(1) of the ITAA 1997). Thus paragraph 109C(1)(a) of the ITAA 1936 will be satisfied at the time of the payment if the taxpayer is still the spouse of a shareholder. If the taxpayer is no longer the spouse of a shareholder at the time of the payment paragraph 109C(1)(b) of the ITAA 1936 applies. The taxpayer has been an associate of a shareholder, their former spouse, at some time. Under paragraph 109C(1)(b), Division 7A may also operate to deem a dividend where the payment or transfer of property is made to an entity that is a former shareholder or former associate of a shareholder. The paragraph operates where a reasonable person would conclude that the payment or transfer of property was made ' because' the recipient entity is a former shareholder or former associate of a shareholder. The Commissioner's view on the meaning of 'because' in context is contained in Taxation Determination TD 2008/14. Paragraph 1 of TD 2008/14 relevantly states: 1. In this context 'because' means by reason that. The reason must be a real and substantial reason for the payment, loan or debt forgiveness concerned, even if it is not the only reason or not the main reason for the transaction. In the family law context, where the matrimonial parties are already divorced, the very reason why the section 79 order is available to the Court is that a matrimonial cause is available by virtue of the recipient's status as a former spouse. Therefore, the "real and substantial" reason for the payment or transfer of property (as contemplated in TD 2008/14) is the recipient's status as a former associate of a shareholder. The temporal question of whether at the time a payment or transfer of property is made, the recipient is still an associate of a shareholder does therefore not impact upon the operation of Division 7A. A reasonable person would conclude that the reason for the cash payment to the taxpayer is the fact that she was previously an associate of a shareholder, her spouse. The explanation which follows only refers to associates but the reasoning is equally applicable to former associates. Subsection 109C(3) defines a payment to mean: (a) a payment to the extent that it is to the entity, on behalf of the entity or for the benefit of the entity; and (b) a credit of an amount to the extent that it is: (i) to the entity; or (ii) on behalf of the entity; or (iii) for the benefit of the entity; and (c) a transfer of property to the entity. Where the positive tests of section 109C of the ITAA 1936 are satisfied, the payment or transfer of property by the company to the taxpayer will be treated as a dividend unless an exclusion contained in Subdivision D of Division 7A applies. Subsection 109C(2) of the ITAA 1936 provides that the dividend is taken to equal the amount paid, subject to section 109Y of the ITAA 1936. As the sum of all the dividends the company is taken under Division 7A of the ITAA 1936 to have paid at the end of the year of income for the year of income in which the cash and assets is transferred, will not be more than the company's distributable surplus for that year the dividend will be the amount paid. Subsection 109C(3) of the ITAA 1936 provides that a payment to an entity means a payment to the extent that it is to the entity. The payment of the cash to the taxpayer is a payment to them and meets the requirements of subsection 109C(3). Subsection 109C(3A) of the ITAA 1936 provides that a loan to an entity is not a payment to the entity. As the payment of cash to the taxpayer is not a loan subsection 109C(4) of the ITAA 1936 does not operate to exclude the payment from the operation of 109C of the ITAA 1936. Therefore section 109C of the ITAA 1936 applies in respect of the payment by the company to the taxpayer. | Summary: Although the taxpayer is not a shareholder at the time of payment, section 109C of the ITAA 1936 provides that the company is taken to pay a dividend to the taxpayer. | Detailed Reasoning - Detailed reasoning: Under subsection 109C(1) of the ITAA 1936 where a private company pays an amount to an entity during the year, that payment is deemed to be a dividend where either: (a) the payment is made when the entity is a shareholder in the private company or an associate of such a shareholder, or (b) a reasonable person would conclude (having regard to all the circumstances) that the payment is made because the entity has been such a shareholder or associate at some time. As discussed in the detailed reasoning for question 2 above the requirements of subsection 109C(1) of the ITAA 1936 will be met and thus the payment is deemed to be a dividend. | Summary: Section 109Z of the ITAA 1936 deems dividends taken to have been paid under Division 7A of the ITAA 1936 to have characteristics that fulfil the requirements of section 44(1) of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: Subsection 6-10(2) of the ITAA 1997 provides that amounts that are not ordinary income but are included in your assessable income by provisions about assessable income are called statutory income. Subsection 44(1) of the ITAA 1936 provides that the assessable income of a resident shareholder in a company includes dividends that are paid to the shareholder out of profits derived by the company from any source. Section 109Z of the ITAA 1936 provides that the dividend a private company is taken under Division 7A of the ITAA 1936 to have paid to an entity is taken for the purposes of the ITAA 1997 and the ITAA 1936 to be paid; (a) to the entity as a shareholder in the private company; and (b) out of the private company's profits. As the sum of all the dividends the company will be taken under Division 7A of the ITAA 1936 to have paid at the end of the relevant year of income will not exceed its distributable surplus for that year, subsection 109Y of the ITAA 1936 does not apply to adjust the amount of the dividend the company is taken under Division 7A of the ITAA 1936 to have paid. Thus the amount of the cash payment is a deemed dividend for the purposes of Division 7A and will be statutory income under section 44(1) of the ITAA 1936. | Summary: Section 109J of the ITAA 1936 will not apply as it only applies to · an obligation of the private company to pay money (s 109J(a)). An obligation of a private company to transfer property does not satisfy this requirement; and · payments for the purposes of 109C. The effect of subsection 109D(4A) of the ITAA 1936 is that, upon conversion of a payment to a loan (before the lodgement day of the company for the relevant year of income) there is no payment for the purposes of 109C of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: Section 109J of Subdivision D of Division 7A reads as follows: 109J PAYMENTS DISCHARGING PECUNIARY OBLIGATIONS NOT TREATED AS DIVIDENDS A private company is not taken under section 109C to pay a dividend because of the payment of an amount, to the extent that the payment: (a) discharges an obligation of the private company to pay money to the entity; and (b) is not more than would have been required to discharge the obligation had the private company and entity been dealing with each other at arm's length. Paragraph 109J(a) of the ITAA 1936 requires the obligation of the private company to be discharged by a payment of money. A discharge of an order of the Family Court to transfer property to an associate of a shareholder, does not involve any payment of money. Therefore, where the order of the Family Court is to require a private company to transfer property to an associate of a shareholder, section 109J does not operate to stop a deemed dividend from arising under section 109C. Further, section 109J does not apply to loans deemed to be dividends for the purposes of section 109D. Section 109D(4A) of the ITAA 1936 provides that where certain conditions are met a payment that a private company would otherwise be taken to have made to an entity is treated for the purposes of Division 7A of the ITAA 1936 as the private company making a loan to the entity at the time of the 'payment'. Subsection 109C(3A) of the ITAA 1936 provides that a loan to an entity is not a payment to the entity. Thus, upon conversion (before the lodgement day of the company for the relevant year of income) of the payment to the taxpayer to a loan there is no payment under 109C of the ITAA 1936 to which section 109J of the ITAA 1936 can apply. | Summary: Subsection 109D(4A) of the ITAA 1936 applies to treat the payment as a loan to the taxpayer at the time the company made the payment and subsection 109C(3A) of the ITAA 1936 provides that a loan to the taxpayer is not a payment to her. | Detailed Reasoning - Detailed reasoning: Whilst the transfer of the assets constitutes a 'payment' for the purposes of paragraph 109C(3)(c), that 'payment' will be converted to a loan before the private company's lodgement day. As a payment that is converted to a loan before lodgement day, subsection 109D(4A) provides that the payment should be treated as a loan at the time the payment is made, for the purposes of Division 7A. Thus there can be no dividend taken to be paid by the company under section 109C of the ITAA 1936. | Summary: The transfer of the assets is not a dividend taken to be paid by the company under Division 7A of the ITAA 1936, nor does it otherwise qualify as a dividend under subsection 6(1) of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: As discussed in response to question 5 converting the 'payment' to a loan means that pursuant to subsection 109D(4A) of the ITAA 1936 there is no payment to which section 109C of the ITAA 1936 can apply. Thus there can be no dividend taken to be paid by the company under section 109C of the ITAA 1936. Section 109D of the ITAA 1997 provides that a private company is taken to pay a dividend to an entity as the end of one of the private company's years of income ( the current year ) if: a) the private company makes a loan to the entity during the current year; and b) the loan is not fully repaid before the lodgement day for the current year; and…. As discussed above, when the transfer of the assets which constitutes a 'payment' to an entity is converted to a loan, subsection 109D(4A) provides that the company is taken to have made a loan to the entity at the time of the 'payment'. However, the taxpayer will repay the loan, in full, before the lodgement day for the year in which the loan was deemed to have been made. Therefore, paragraph 109D(1)(b) will not be satisfied. Further, as the taxpayer is not a shareholder at the time of the payment, the payment to the taxpayer does not meet the requirements of paragraph 6(1)(a) of the ITAA 1936 definition of dividend. | Summary: As the transfer of the assets is not a dividend it is not assessable under subsection 44(1) of the ITAA 1936. | Detailed Reasoning - Detailed reasoning: Subsection 44(1) of the ITAA 1936 provides that the assessable income of a resident shareholder in a company includes dividends paid to the shareholder by the company. For the reason discussed above the transfer of the assets to the taxpayer by the company is not a deemed dividend under Division 7A of the ITAA 1936, nor does it otherwise qualify as a dividend under subsection 6(1) of the ITAA 1936. Thus it is not statutory income under subsection 44(1) of the ITAA 1936. | Summary: Section 109L of the ITAA 1936 will not apply in regard to either the proposed transfer of cash or the proposed transfer of the assets | Detailed Reasoning - Detailed reasoning: Subsection 109L(1) of the ITAA 1936 states; A private company is not taken under section 109C or 109D to pay a dividend because of a payment or loan the private company makes to an entity, to the extent that the payment or loan would be included in the entity's assessable income apart from this Division (as it operates in conjunction with section 44). Subsection 109L(2) of the ITAA 1936states; In addition, a private company is not taken under section 109C or 109D to pay a dividend because of a payment or loan that the private company made to an entity to the extent that a provision of this Act (other than this Division) has the effect that the payment or loan is not included in the entity's assessable income even though it would otherwise be included. For the reasons discussed above the transfer of the assets is not a deemed dividend under section 109C of the ITAA 1936 due to the operation of subsection 109D(4A) of the ITAA 1936. Before section 109L of the ITAA 1936 can apply there must be a dividend to which section 109C or 109D of the ITAA 1936 will apply. As there is no such dividend arising from the transfer of the assets 109L can not apply. Therefore section 109L has no application to your circumstances. | Summary: The answer to questions 2, 3, and 4 will not change. | Detailed Reasoning - Detailed reasoning: As discussed in the answer to question 2 subsection 109C(1) of the ITAA 1936 will be satisfied regardless of whether the taxpayer is or is not at the time of payment married to their current spouse. Paragraph 109C(1)(a) of the ITAA 1936 will be satisfied at the time of the payment if the taxpayer is still the spouse of the shareholder. If the taxpayer is no longer the spouse of the shareholder at the time of the payment paragraph 109C(1)(b) of the ITAA 1936 applies. The taxpayer has been an associate of a shareholder, at some time. Once 109C applies the issue of the marital status between the taxpayer and the shareholder is not relevant to whether the payment is a dividend for the purposes of subsection 6(1)of the ITAA 1936 or whether the payment is statutory income under subsection 44(1) of the ITAA 1936. | Summary: The answer to questions 1, 5, 6, 7, 8 and 9 will not change. | Detailed Reasoning - Detailed reasoning: Whether the taxpayer is an employee of the company at the time of payment is not relevant to the application of, the meaning of dividend under subsection 6(1) of the ITAA 1936 and subsection 44(1) of the ITAA 1936. Further, it is not considered that the cash payment to the taxpayer by the company is being paid to the taxpayer in the capacity as an employee. As such, section 109ZB is not relevant in considering whether the payment is the provision of a fringe benefit for the purposes of the Fringe Benefits Tax Assessment Act 1986