457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
Aug 11th 2008, 4:12 am
#1
Just Joined
Thread Starter
Joined: Aug 2008
Posts: 4
457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
On a 457 visa....
Asked employer if the LAFHA cld be put up from 500$ a week to more realistic amount for Sydney rent as we have to live on Northern Shore near work = expensive!...
This was their answer:
LAFHA will be included in your package so you are permitted to change this amount. However, you should note that individuals have liability for reporting (with appropriate documentation) all parts/components of their LAFHA
(rental costs, food etc) to the Australian Tax Office in your annual
personal tax return.
Is this normal that 'I' do it, and how do I go about it? I didn't know I had to do a personal return, is this just a case of keeping documents like leases and food receipts (one or 2) in case I try to ask for an obsene amount of LAFHA claiming my rent is 2000$ a week and food is 500$ (which I won't do incidentally...).. in case the ATO thinks you are pulling a swift one and needs proof of 'reasonable' LAFHA amounts?
Anyhow seems they are in agreement that we can claim more
Secondly they have said they will offer relocation expenses up to a max of 22k$...this includes the temp accomodation at the beginning, flights, container of furniture etc....so very generous and fair we believe...problem being we actually live in a place which is furnished by the company at the mo and therefore have absolutely no furniture, not even a fork or an iron, just some clothes of our own...we asked if we could use the remainder of the relocation allowance to buy fridges and beds when we arrive rather than wait one year to get the leftover amount, otherwise it will make it very difficult to get by when we have to buy everything with no money when we arrive....this was their reply..
You can spend as you wish but you should be aware that if anything incurs FBT (Fringe Benefit Tax)
you will be required to pay this out of the allocated relocation budget. Purchasing furniture will attract FBT and you can find out more about this on the Australian Tax Website. Maybe you could rent furniture?
PLEASE explain what we do and how much we will be taxed, is it worth us buying stuff before we go and then waiting the year to get the money, is it still taxed as a FTB then?
If the amount we had left was say $10,000 and we bought a fridge and an washing machine for 2,000, and 8000 on furniture HOW do we pay tax on it? I am so confused, I am awae they will help us with these anwers but wondered if anyone had any advice regarding the LAFHA and the relocation budget....???
Thankyou
PercySlade
Asked employer if the LAFHA cld be put up from 500$ a week to more realistic amount for Sydney rent as we have to live on Northern Shore near work = expensive!...
This was their answer:
LAFHA will be included in your package so you are permitted to change this amount. However, you should note that individuals have liability for reporting (with appropriate documentation) all parts/components of their LAFHA
(rental costs, food etc) to the Australian Tax Office in your annual
personal tax return.
Is this normal that 'I' do it, and how do I go about it? I didn't know I had to do a personal return, is this just a case of keeping documents like leases and food receipts (one or 2) in case I try to ask for an obsene amount of LAFHA claiming my rent is 2000$ a week and food is 500$
(which I won't do incidentally...).. in case the ATO thinks you are pulling a swift one and needs proof of 'reasonable' LAFHA amounts?Anyhow seems they are in agreement that we can claim more
Secondly they have said they will offer relocation expenses up to a max of 22k$...this includes the temp accomodation at the beginning, flights, container of furniture etc....so very generous and fair we believe...problem being we actually live in a place which is furnished by the company at the mo and therefore have absolutely no furniture, not even a fork or an iron, just some clothes of our own...we asked if we could use the remainder of the relocation allowance to buy fridges and beds when we arrive rather than wait one year to get the leftover amount, otherwise it will make it very difficult to get by when we have to buy everything with no money when we arrive....this was their reply..
You can spend as you wish but you should be aware that if anything incurs FBT (Fringe Benefit Tax)
you will be required to pay this out of the allocated relocation budget. Purchasing furniture will attract FBT and you can find out more about this on the Australian Tax Website. Maybe you could rent furniture?
PLEASE explain what we do and how much we will be taxed, is it worth us buying stuff before we go and then waiting the year to get the money, is it still taxed as a FTB then?
If the amount we had left was say $10,000 and we bought a fridge and an washing machine for 2,000, and 8000 on furniture HOW do we pay tax on it? I am so confused, I am awae they will help us with these anwers but wondered if anyone had any advice regarding the LAFHA and the relocation budget....???
Thankyou
PercySlade
Aug 11th 2008, 7:17 am
#2
Joined: May 2006
Location: in the Sydney asylum
Posts: 20,690
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
Get an accountant you will find it much easier 
Aug 11th 2008, 7:32 am
#3
BE Enthusiast
Joined: Mar 2008
Location: Manly, NSW
Posts: 313
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
On a 457 visa....
Asked employer if the LAFHA cld be put up from 500$ a week to more realistic amount for Sydney rent as we have to live on Northern Shore near work = expensive!...
This was their answer:
LAFHA will be included in your package so you are permitted to change this amount. However, you should note that individuals have liability for reporting (with appropriate documentation) all parts/components of their LAFHA
(rental costs, food etc) to the Australian Tax Office in your annual
personal tax return.
Is this normal that 'I' do it, and how do I go about it? I didn't know I had to do a personal return, is this just a case of keeping documents like leases and food receipts (one or 2) in case I try to ask for an obsene amount of LAFHA claiming my rent is 2000$ a week and food is 500$ (which I won't do incidentally...).. in case the ATO thinks you are pulling a swift one and needs proof of 'reasonable' LAFHA amounts?
Anyhow seems they are in agreement that we can claim more
Secondly they have said they will offer relocation expenses up to a max of 22k$...this includes the temp accomodation at the beginning, flights, container of furniture etc....so very generous and fair we believe...problem being we actually live in a place which is furnished by the company at the mo and therefore have absolutely no furniture, not even a fork or an iron, just some clothes of our own...we asked if we could use the remainder of the relocation allowance to buy fridges and beds when we arrive rather than wait one year to get the leftover amount, otherwise it will make it very difficult to get by when we have to buy everything with no money when we arrive....this was their reply..
You can spend as you wish but you should be aware that if anything incurs FBT (Fringe Benefit Tax)
you will be required to pay this out of the allocated relocation budget. Purchasing furniture will attract FBT and you can find out more about this on the Australian Tax Website. Maybe you could rent furniture?
PLEASE explain what we do and how much we will be taxed, is it worth us buying stuff before we go and then waiting the year to get the money, is it still taxed as a FTB then?
If the amount we had left was say $10,000 and we bought a fridge and an washing machine for 2,000, and 8000 on furniture HOW do we pay tax on it? I am so confused, I am awae they will help us with these anwers but wondered if anyone had any advice regarding the LAFHA and the relocation budget....???
Thankyou
PercySlade
Asked employer if the LAFHA cld be put up from 500$ a week to more realistic amount for Sydney rent as we have to live on Northern Shore near work = expensive!...
This was their answer:
LAFHA will be included in your package so you are permitted to change this amount. However, you should note that individuals have liability for reporting (with appropriate documentation) all parts/components of their LAFHA
(rental costs, food etc) to the Australian Tax Office in your annual
personal tax return.
Is this normal that 'I' do it, and how do I go about it? I didn't know I had to do a personal return, is this just a case of keeping documents like leases and food receipts (one or 2) in case I try to ask for an obsene amount of LAFHA claiming my rent is 2000$ a week and food is 500$
(which I won't do incidentally...).. in case the ATO thinks you are pulling a swift one and needs proof of 'reasonable' LAFHA amounts?Anyhow seems they are in agreement that we can claim more
Secondly they have said they will offer relocation expenses up to a max of 22k$...this includes the temp accomodation at the beginning, flights, container of furniture etc....so very generous and fair we believe...problem being we actually live in a place which is furnished by the company at the mo and therefore have absolutely no furniture, not even a fork or an iron, just some clothes of our own...we asked if we could use the remainder of the relocation allowance to buy fridges and beds when we arrive rather than wait one year to get the leftover amount, otherwise it will make it very difficult to get by when we have to buy everything with no money when we arrive....this was their reply..
You can spend as you wish but you should be aware that if anything incurs FBT (Fringe Benefit Tax)
you will be required to pay this out of the allocated relocation budget. Purchasing furniture will attract FBT and you can find out more about this on the Australian Tax Website. Maybe you could rent furniture?
PLEASE explain what we do and how much we will be taxed, is it worth us buying stuff before we go and then waiting the year to get the money, is it still taxed as a FTB then?
If the amount we had left was say $10,000 and we bought a fridge and an washing machine for 2,000, and 8000 on furniture HOW do we pay tax on it? I am so confused, I am awae they will help us with these anwers but wondered if anyone had any advice regarding the LAFHA and the relocation budget....???
Thankyou
PercySlade
dont know the answer but please keep us posted.
Aug 11th 2008, 8:35 am
#4
BE Forum Addict
Joined: Jun 2007
Location: Peregian Springs, Sunshine Coast
Posts: 1,872
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
Interesting....It sounds like you are trying to claim LAFHA over and above what your employer decided?
LAFHA is earned tax free so as far as I am aware is not reported back to the tax man..only your taxable salary is reported back....don't forget that this needs to be over the minimum salary level for your type of employment to comply with 457 rules.
I have not finished my tax return yet, but have not come to anything that mentions you have to justify the amount of LAFHA.
LAFHA is earned tax free so as far as I am aware is not reported back to the tax man..only your taxable salary is reported back....don't forget that this needs to be over the minimum salary level for your type of employment to comply with 457 rules.
I have not finished my tax return yet, but have not come to anything that mentions you have to justify the amount of LAFHA.
Aug 11th 2008, 8:42 am
#5
Home and Happy
Joined: Dec 2002
Location: Keep true friends and puppets close, trust no-one else...
Posts: 93,810
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
On a 457 visa....
Asked employer if the LAFHA cld be put up from 500$ a week to more realistic amount for Sydney rent as we have to live on Northern Shore near work = expensive!...
This was their answer:
LAFHA will be included in your package so you are permitted to change this amount. However, you should note that individuals have liability for reporting (with appropriate documentation) all parts/components of their LAFHA
(rental costs, food etc) to the Australian Tax Office in your annual
personal tax return.
Is this normal that 'I' do it, and how do I go about it? I didn't know I had to do a personal return, is this just a case of keeping documents like leases and food receipts (one or 2) in case I try to ask for an obsene amount of LAFHA claiming my rent is 2000$ a week and food is 500$ (which I won't do incidentally...).. in case the ATO thinks you are pulling a swift one and needs proof of 'reasonable' LAFHA amounts?
Anyhow seems they are in agreement that we can claim more
Secondly they have said they will offer relocation expenses up to a max of 22k$...this includes the temp accomodation at the beginning, flights, container of furniture etc....so very generous and fair we believe...problem being we actually live in a place which is furnished by the company at the mo and therefore have absolutely no furniture, not even a fork or an iron, just some clothes of our own...we asked if we could use the remainder of the relocation allowance to buy fridges and beds when we arrive rather than wait one year to get the leftover amount, otherwise it will make it very difficult to get by when we have to buy everything with no money when we arrive....this was their reply..
You can spend as you wish but you should be aware that if anything incurs FBT (Fringe Benefit Tax)
you will be required to pay this out of the allocated relocation budget. Purchasing furniture will attract FBT and you can find out more about this on the Australian Tax Website. Maybe you could rent furniture?
PLEASE explain what we do and how much we will be taxed, is it worth us buying stuff before we go and then waiting the year to get the money, is it still taxed as a FTB then?
If the amount we had left was say $10,000 and we bought a fridge and an washing machine for 2,000, and 8000 on furniture HOW do we pay tax on it? I am so confused, I am awae they will help us with these anwers but wondered if anyone had any advice regarding the LAFHA and the relocation budget....???
Thankyou
PercySlade
Asked employer if the LAFHA cld be put up from 500$ a week to more realistic amount for Sydney rent as we have to live on Northern Shore near work = expensive!...
This was their answer:
LAFHA will be included in your package so you are permitted to change this amount. However, you should note that individuals have liability for reporting (with appropriate documentation) all parts/components of their LAFHA
(rental costs, food etc) to the Australian Tax Office in your annual
personal tax return.
Is this normal that 'I' do it, and how do I go about it? I didn't know I had to do a personal return, is this just a case of keeping documents like leases and food receipts (one or 2) in case I try to ask for an obsene amount of LAFHA claiming my rent is 2000$ a week and food is 500$
(which I won't do incidentally...).. in case the ATO thinks you are pulling a swift one and needs proof of 'reasonable' LAFHA amounts?Anyhow seems they are in agreement that we can claim more
Secondly they have said they will offer relocation expenses up to a max of 22k$...this includes the temp accomodation at the beginning, flights, container of furniture etc....so very generous and fair we believe...problem being we actually live in a place which is furnished by the company at the mo and therefore have absolutely no furniture, not even a fork or an iron, just some clothes of our own...we asked if we could use the remainder of the relocation allowance to buy fridges and beds when we arrive rather than wait one year to get the leftover amount, otherwise it will make it very difficult to get by when we have to buy everything with no money when we arrive....this was their reply..
You can spend as you wish but you should be aware that if anything incurs FBT (Fringe Benefit Tax)
you will be required to pay this out of the allocated relocation budget. Purchasing furniture will attract FBT and you can find out more about this on the Australian Tax Website. Maybe you could rent furniture?
PLEASE explain what we do and how much we will be taxed, is it worth us buying stuff before we go and then waiting the year to get the money, is it still taxed as a FTB then?
If the amount we had left was say $10,000 and we bought a fridge and an washing machine for 2,000, and 8000 on furniture HOW do we pay tax on it? I am so confused, I am awae they will help us with these anwers but wondered if anyone had any advice regarding the LAFHA and the relocation budget....???
Thankyou
PercySlade
Aug 11th 2008, 10:02 am
#6
Just Joined
Thread Starter
Joined: Aug 2008
Posts: 4
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
Interesting....It sounds like you are trying to claim LAFHA over and above what your employer decided?
Why is that interesting?
LAFHA is earned tax free so as far as I am aware is not reported back to the tax man..only your taxable salary is reported back....don't forget that this needs to be over the minimum salary level for your type of employment to comply with 457 rules.
Why is that interesting?
LAFHA is earned tax free so as far as I am aware is not reported back to the tax man..only your taxable salary is reported back....don't forget that this needs to be over the minimum salary level for your type of employment to comply with 457 rules.
Aug 11th 2008, 10:04 am
#7
Just Joined
Thread Starter
Joined: Aug 2008
Posts: 4
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
Can I look at an online blank version?
Aug 11th 2008, 10:47 am
#9
BE Forum Addict
Joined: Jun 2005
Location: Ayr then Hampshire; Now Beaumaris, Melbourne
Posts: 1,034
Re: 457 + LAFHA, FTB and personal tax returns...HELPPPPPPPPPPPP
I recently went PR but had LAFHA for 2.5 years. My understanding is that LAFHA can only be paid via your employer, it is NOT something that an individual can submit via their own personal tax return.
The liability is on the employer to pay a reasonable amount to individuals who meet the ATO criteria and the payment must be within the allowances set out by the ATO. Rather than adhere strictly to the ATO guidelines for food, housing etc most companies seem to pay a set amount.
LAFHA does not cost your employer anything (other than having a process in place to ensure that employees are eligible, and then making the payments) so its possible that you can negotiate with them. I came out here 3 years ago with a colleague and were told we could have 30% of our gross salary as LAFHA. Another colleague joined a year later and got 35% and one chap joined last month and has negotiated 40%.
All we had to do was confirm on an annual basis that we did not intend living in Australia after our visa expired, that we still had interests in the UK and Australia was not our main residence. Mine ceased when I bought a house here, before I got PR, as the ATO considered at this point that my intentions had changed.
Do a search on here for LAFHA as there are many many posts on it. What I can say though is that this is a particularly grey area !
Good luck.
The liability is on the employer to pay a reasonable amount to individuals who meet the ATO criteria and the payment must be within the allowances set out by the ATO. Rather than adhere strictly to the ATO guidelines for food, housing etc most companies seem to pay a set amount.
LAFHA does not cost your employer anything (other than having a process in place to ensure that employees are eligible, and then making the payments) so its possible that you can negotiate with them. I came out here 3 years ago with a colleague and were told we could have 30% of our gross salary as LAFHA. Another colleague joined a year later and got 35% and one chap joined last month and has negotiated 40%.
All we had to do was confirm on an annual basis that we did not intend living in Australia after our visa expired, that we still had interests in the UK and Australia was not our main residence. Mine ceased when I bought a house here, before I got PR, as the ATO considered at this point that my intentions had changed.
Do a search on here for LAFHA as there are many many posts on it. What I can say though is that this is a particularly grey area !
Good luck.
