LAFHA under threat
Nov 30th 2011, 11:19 pm
#91
BE Forum Addict
Joined: Aug 2010
Location: Not Brisbane
Posts: 1,210
Re: LAFHA under threat
Details on the LAFHA changes pasted from the treasurers website...
"Fringe benefits tax (FBT) reform – Living-away-from-home allowance and benefits
The Government will introduce reforms to stop individuals from being able to exploit the tax exemption for living-away-from-home allowance and benefits.
This tax exemption is being increasingly misused by a narrow group of people, particularly highly-paid executives and foreign workers, at the expense of Australian taxpayers.
Rorting of this tax exemption was one of the issues raised at the Tax Forum, and has seen the total amount of tax-free living-away-from-home allowance reported by employers to the Australian Taxation Office increase from $162 million in 2004-05 to $740 million in 2010-11.
Under reforms announced today:
access to the tax exemption for temporary residents will be limited to those who maintain a residence for their own use in Australia, which they are living away from for work purposes, such as 'fly-in fly-out' workers; and
individuals will be required to substantiate their actual expenditure on accommodation and food beyond a statutory amount.
No permanent resident legitimately using this tax exemption for accommodation and food expenses will lose any entitlements.
These reforms will not affect other tax concessions, such as those that apply to travel and meal allowances, and remote area fringe benefits.
The reforms will apply from 1 July 2012. This start date will enable the Government to undertake an extensive consultation process on these reforms, so appropriate transitional arrangements can be put in place, including in regional Australia.
These changes will ensure that a level playing field exists between temporary residents and permanent residents, and that Australian taxpayers are not funding the unfair exploitation of concessions.
This reform progresses recommendation 9(c) of the Australia's Future Tax System Review, and will provide savings of $683.3 million over the forward estimates."
See here for further details: http://www.treasurer.gov.au/DisplayD...ear=&DocType=0
"Fringe benefits tax (FBT) reform – Living-away-from-home allowance and benefits
The Government will introduce reforms to stop individuals from being able to exploit the tax exemption for living-away-from-home allowance and benefits.
This tax exemption is being increasingly misused by a narrow group of people, particularly highly-paid executives and foreign workers, at the expense of Australian taxpayers.
Rorting of this tax exemption was one of the issues raised at the Tax Forum, and has seen the total amount of tax-free living-away-from-home allowance reported by employers to the Australian Taxation Office increase from $162 million in 2004-05 to $740 million in 2010-11.
Under reforms announced today:
access to the tax exemption for temporary residents will be limited to those who maintain a residence for their own use in Australia, which they are living away from for work purposes, such as 'fly-in fly-out' workers; and
individuals will be required to substantiate their actual expenditure on accommodation and food beyond a statutory amount.
No permanent resident legitimately using this tax exemption for accommodation and food expenses will lose any entitlements.
These reforms will not affect other tax concessions, such as those that apply to travel and meal allowances, and remote area fringe benefits.
The reforms will apply from 1 July 2012. This start date will enable the Government to undertake an extensive consultation process on these reforms, so appropriate transitional arrangements can be put in place, including in regional Australia.
These changes will ensure that a level playing field exists between temporary residents and permanent residents, and that Australian taxpayers are not funding the unfair exploitation of concessions.
This reform progresses recommendation 9(c) of the Australia's Future Tax System Review, and will provide savings of $683.3 million over the forward estimates."
See here for further details: http://www.treasurer.gov.au/DisplayD...ear=&DocType=0
Dec 1st 2011, 3:23 am
#92
Social Grenade Thrower
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
Re: LAFHA under threat
I have to admit, naturally I would like to receive LAHFA and I'm probably as entitled to as most, but I hold an Aussie passport care of time spent here in my youth. A bunch of us at work were transferred here early this year, and I was the only one who didn't receive LAHFA because I hold a passport. Mrs B and I have our families are back in the UK and we intend to return in a couple of years, but we have no proof of our intention to return - we are not on temporary visa's.
Many of my work collegues who receive LAHFA have rented out their houses in the UK which is paying the mortgage so in actual fact they are not out of pocket.
All of us negotiated, agreed terms and came to Australia without the knowledge of LAHFA. It was only when one of the group discovered it on a forum like this that everyone jumped on the bandwagon. I will admit, at the time I thought WOW - this is a rort - and a big bonus and not really necassary but I will take it anyway. In the end I couldn't but good luck to those who do.
Now that I am an Aussie tax payer and I see others receiving LAHFA when it's not really necessary (obviously there are certain cases where it is) of course I'm going to want my tax dollars spent elsewhere.
There will be no winners in the argument. Someone's loss is always someone elses gain.
Many of my work collegues who receive LAHFA have rented out their houses in the UK which is paying the mortgage so in actual fact they are not out of pocket.
All of us negotiated, agreed terms and came to Australia without the knowledge of LAHFA. It was only when one of the group discovered it on a forum like this that everyone jumped on the bandwagon. I will admit, at the time I thought WOW - this is a rort - and a big bonus and not really necassary but I will take it anyway. In the end I couldn't but good luck to those who do.
Now that I am an Aussie tax payer and I see others receiving LAHFA when it's not really necessary (obviously there are certain cases where it is) of course I'm going to want my tax dollars spent elsewhere.
There will be no winners in the argument. Someone's loss is always someone elses gain.
Dec 1st 2011, 5:38 am
#94
Social Grenade Thrower
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
Re: LAFHA under threat
Yes I do.......and I make a loss of 500 pounds per month due to mortgage/rent ratio. Plus have had a couple of empty months and some maintenance charges (boiler stat replacement, removal of bee hive!!, new dishwasher etc etc) I knew the circumstances whern I moved over, but we also had a successful home based business in UK and had to give that up (long story!!) so the company gave the 'LAFHA' angle as compensation for reduced income compared to what we would of had in UK.
I appreciate that my circumstances are personal to me and we all have differing reasons and financial status, but we gave up a lot to come here and in no way are 'in profit'. For me it was based on professional development plus a try before you buy process, if we like it here then MAYBE go PR. But the loss of LAFHA reduces my take home by 25%.....that in anyones book is a lot to try and cover.
I appreciate that my circumstances are personal to me and we all have differing reasons and financial status, but we gave up a lot to come here and in no way are 'in profit'. For me it was based on professional development plus a try before you buy process, if we like it here then MAYBE go PR. But the loss of LAFHA reduces my take home by 25%.....that in anyones book is a lot to try and cover.
Dec 1st 2011, 6:35 am
#95
Forum Regular
Joined: Jun 2010
Location: Darwin australia
Posts: 253
Re: LAFHA under threat
We came out on a 457 and obviously keep our home in the uk. We have to send $750 pcm home to cover this, we also spend $1000 pcm on childcare for my son for 3 days pw (he should be at school in the uk). I left a deputy heads salary behind but here as a teacher on a temporary visa can only do casual n temp work - i currently get 1/2 days pw. Lafha compensates for the above costs - once and if we get pr - we can sell uk home, get childcare rebate and I can get a permenant job....
Dec 1st 2011, 7:42 am
#96
BE Forum Addict
Joined: Oct 2011
Posts: 1,217
Re: LAFHA under threat
Could I enquire about LAFHA when I come over as I will have a house to pay for still there? And family to support until they get the required visa..
Dec 1st 2011, 9:36 am
#97
Social Grenade Thrower
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
Dec 2nd 2011, 12:09 am
#98
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: LAFHA under threat
Yes I do.......and I make a loss of 500 pounds per month due to mortgage/rent ratio. Plus have had a couple of empty months and some maintenance charges (boiler stat replacement, removal of bee hive!!, new dishwasher etc etc) I knew the circumstances whern I moved over, but we also had a successful home based business in UK and had to give that up (long story!!) so the company gave the 'LAFHA' angle as compensation for reduced income compared to what we would of had in UK.
I appreciate that my circumstances are personal to me and we all have differing reasons and financial status, but we gave up a lot to come here and in no way are 'in profit'. For me it was based on professional development plus a try before you buy process, if we like it here then MAYBE go PR. But the loss of LAFHA reduces my take home by 25%.....that in anyones book is a lot to try and cover.
I appreciate that my circumstances are personal to me and we all have differing reasons and financial status, but we gave up a lot to come here and in no way are 'in profit'. For me it was based on professional development plus a try before you buy process, if we like it here then MAYBE go PR. But the loss of LAFHA reduces my take home by 25%.....that in anyones book is a lot to try and cover.
Dec 2nd 2011, 12:11 am
#99
Possum. Amiculum. Latrina
Joined: Jan 2011
Location: Footloose
Posts: 3,427
Dec 2nd 2011, 2:25 am
#101
Just Joined
Joined: Dec 2011
Posts: 1
Re: LAFHA under threat
I'm glad its going, or at least getting tighter. The strength of the dollar and high wages means theres enough incentive for people to come for a few years and earn good money if they are planning on going home again. Its slightly galling to see people swan in, earn good wedge, pay no taxes (whilst still using many public services) and then bugger off again. If people want to go somewhere to make a quick buck they can go to a shithole like dubai.
Does no one realise that Australians in the UK get exactly the same treatment? It is not called LAFHA but they can still deduct their rent and food (AND OTHER) costs from their tax bill - it is administered slightly differently in so far as it is done as a rebate at the end, not from month to month but it is the same tax break. It is in fact more generous! Furthermore, there are no charges for health care or schools in the UK - so they get all the benefits and none of the costs.
If it goes here then I hope that the UK government removes it from the other side - A reciprocal tax arrangement needs to have 2 sides - so all the Australians celebrating may have friends (or even themselves) be finding it less exciting when the same happens in the UK to them
Dec 2nd 2011, 2:41 am
#102
Social Grenade Thrower
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
Re: LAFHA under threat
Does no one realise that Australians in the UK get exactly the same treatment? It is not called LAFHA but they can still deduct their rent and food (AND OTHER) costs from their tax bill - it is administered slightly differently in so far as it is done as a rebate at the end, not from month to month but it is the same tax break. It is in fact more generous! Furthermore, there are no charges for health care or schools in the UK - so they get all the benefits and none of the costs.
If it goes here then I hope that the UK government removes it from the other side - A reciprocal tax arrangement needs to have 2 sides - so all the Australians celebrating may have friends (or even themselves) be finding it less exciting when the same happens in the UK to them
If it goes here then I hope that the UK government removes it from the other side - A reciprocal tax arrangement needs to have 2 sides - so all the Australians celebrating may have friends (or even themselves) be finding it less exciting when the same happens in the UK to them
As for negative gearing, even though I am a Tax Resident, I am unable to claim any profit or loss on foreign investments or holdings. I can not claim child care rebate, I can not claim for public school expenses. As Temp Visa holder you can claim nothing which other tax residents do...hence why we are so hacked off at the possibility of losing LAFHA.
Dec 2nd 2011, 2:42 am
#103
Social Grenade Thrower
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
Dec 2nd 2011, 3:16 am
#104
Lost in BE Cyberspace
Joined: Dec 2010
Posts: 14,040
Re: LAFHA under threat
In an effort to simplify the "worlds most complicated tax system" it would make more sense to remove LAHFA and give you the bits you are currently not entitled to.
Dec 2nd 2011, 3:50 am
#105
Emeritus Senior Minister
Joined: Dec 2010
Location: Singapore
Posts: 199
Re: LAFHA under threat
Originally Posted by Beoz
In an effort to simplify the "worlds most complicated tax system" it would make more sense to remove LAHFA and give you the bits you are currently not entitled to.
