northernbird

We are here on a 4 year 457 visa. We own no property in England and have decided for financial reasons to purchase a house here. My husbands work colleague gets the LAFHA and my husband doesn't. My husband was told that as we own no property in England and as such have no ties there and the fact we have set roots down here by purchasing property then we don't qualify for the LAFHA.

Can one of the nice tax people help.

Thanks awfully.

herrchook

Might be worth dropping Allan Collett (GoMAtilda) a note as I think he's an accountant as well as an immigration agent. He hangs around the immigration forum so might be worth posting your question in there.

Gill

comet555

I believe I saw this discussed on Allan's site. This is the only link I could find, although it's not the one I remember.

http://gomatildaforums.com/eve/forum...661#4831080661

I would do a search on this site, maybe look for LAFHA and house.

Alan Collett

As others have said, the LAFHA is one of those fuzzy grey areas of tax where there isn't a lot of information out there on which you can base an argument.

This said, my understanding is that the LAFHA is available to individuals who are living away from their "usual place of abode." In other words there has to be an intention to return from whence you came. If you don't have a residence in the place from whence you came (the UK) and do now have one where you are now working it is a fairly strong contention that you don't intend to return to England, irrespective of your visa category (which doesn't provide for automatic permanent residency).

In addition, it is the employer's choice as to whether the LAFHA is to be made available, so if the employer says its not available there's not a lot you can do apart from leaving the employer, and seeking a new employer sponsorship with an employer who is nevertheless happy to provide the LAFHA given your circumstances.

Not sure that this helps your situation a great deal, but hope it clarifies matters.

Best regards.

Big Galah

How can you legislate for something like that?

e.g.

ATO: You can't claim LAFHA anymore, you've moved here permanently

Me: But I intend going back next year

ATO: Oh, okay then.

What if your employment contract keeps getting extended? I'm under the impression that not having owned a home in the country or state (it applies to inter-state too) you moved from doesn't necessarily mean you can't claim LAFHA. A grey area indeed.

BTW: if you now own a home, the LAHFA benefit would be relatively small anyway, it's biggest benefit is getting the amount you spend on rent as extra tax-free.

My only concern would be the ATO trying to retrospectively claim back benefits if they decide you weren't entitled to it in the first place. Does anyone know if they can do this, or is there some responsibility on your employer?


Cheers,

Big.

Alan Collett

The LAFHA is administered under the Fringe Benefits Tax legislation, so the risk of getting it wrong and paying additional tax sits with the employer.

This means that the employer sets the agenda insofar as agreeing to the inclusion of the LAFHA in a salary package is concerned. As such it is the employer's conditions the individual employee has to satisfy.

Best regards.

Big Galah

Thanks for the clarification.