Sch 2Modifications of the FBTA Act

Schedule 2—Modifications of the FBTA Act Note: See the definition of FBTA Act in section 4 and subsection 33(2). FBTA Act 1 Subsections 7(1), (2), (3) and (4) Repeal the subsections, substitute: (1) Where, at any time on a day, a person: (a) applies a car held by the person; or (b) makes a car held by the person available; for the private use of a bankrupt, the car is taken, for the purposes of this Act, to constitute a benefit provided on that day by the person to the bankrupt. 2 Subsections 8(1) and (2) Repeal the subsections. 3 Section 9 #### 9 Taxable value of car fringe benefits—statutory formula (1) Subject to this Part, where one or more car fringe benefits in relation to an employer in relation to a contribution assessment period relate to a particular car held by a particular person (the provider), the taxable value of that fringe benefit, or the aggregate of the taxable values of those fringe benefits, as the case may be, in relation to that contribution assessment period, is the amount calculated in accordance with the formula:  (2) For the purposes of this section: (a) the base value of the car is the sum of: (i) where, at the earliest holding time, the car was owned by the provider or an associate of the provider, the amount calculated in accordance with the formula AB, where: > A is the cost price of the car to the provider or associate, as the case may be; and (A) in a case where the commencement of the contribution assessment period is later than the fourth anniversary of the earliest holding time—⅔; or (ii) in a case to which subparagraph (i) does not apply—the amount calculated in accordance with the formula AB, where: > A is the leased car value of the car at the earliest holding time; and (A) in a case where the commencement of the contribution assessment period is later than the fourth anniversary of the earliest holding time—⅔; or (iii) the cost price of each non‑business accessory that: (A) was fitted to the car after the earliest holding time and before the end of the contribution assessment period; and (B) remained fitted to the car at a time during the contribution assessment period when the car was held by the provider; (b) the earliest holding time, in relation to a car held by the provider at a particular time (the current time), is the earliest time before the current time when the car was held by the provider or an associate of the provider; and (c) the amount of the recipient’s payment is the sum of: (i) in a case where expenses were incurred to the provider or employer during the holding period by recipients of the car fringe benefits by way of consideration for the provision of the car fringe benefits—the amount of those expenses paid by the recipients less any amount paid or payable to the recipients by way of reimbursement of those expenses; and (ii) in a case where car expenses in respect of fuel or oil for the car were incurred during the holding period by recipients of the car fringe benefits and the persons incurring those expenses give to the employer, before the declaration date, declarations, in a form approved by the Inspector‑General under section 6D of the Bankruptcy Act 1966, in respect of those expenses—the amount of those expenses paid by the recipients less any amount paid or payable to the recipients by way of reimbursement of those expenses; and (iii) in a case where: (A) car expenses in respect of the car (other than car expenses in respect of fuel or oil for the car) were incurred during the holding period by recipients of the car fringe benefits; and (B) documentary evidence of those expenses is obtained by the persons incurring the expenses and given to the employer before the declaration date; the amount of those expenses paid by the recipients less any amount paid or payable to the recipients by way of reimbursement of those expenses; and (d) the holding period is the period in the contribution assessment period when the car was held by the provider. > Note: Example: > Note: Christopher was declared bankrupt on 1 July 2020. > Note: In June 2021 Christopher’s employer acquires a car for Christopher’s use. The purchase price, and base value, of the car is $20,000. > Note: As part of his employment arrangement, the car is made available to Christopher for the entire period 1 July 2021 to 30 June 2022 during which time he travels 10,000 kilometres. During the period Christopher makes a $300 contribution to expenses in the form of unreimbursed expenditure on petrol. > Note: It is necessary to assess the value of a car fringe benefit provided to Christopher by his employer for the contribution assessment period 1 July 2021 to 30 June 2022. > Note: Applying the formula in subsection (1), the value of the car fringe benefit is calculated as follows: > Note:  > declaration date means the date occurring 21 days after the end of a contribution assessment period in relation to a bankrupt. > taxable value of a fringe benefit means the value, for the purposes of the Bankruptcy Act 1966, of the benefit. 4 Sections 10 to 12 5 Subsection 13(1) Omit all the words after “section 9”. 6 Section 22A 7 Section 23 Omit “external”. 8 Section 26 #### 26 Taxable value of housing fringe benefits Subject to this Part, the value of a housing fringe benefit in relation to a contribution assessment period is the portion of the market value of the recipient’s current housing right that exceeds the recipient’s rent. 9 Sections 28 to 29A 10 At the end of section 31 Add: (2) For the purposes of this section, “deducted home consumption expenditure” referred to in the definition of exempt food component in section 136 is to be taken to be: (a) in relation to a person of the age of 12 years or over—$42; and (b) in relation to a person under the age of 12 years—$21. > Note: Example: Calculation of the value of a living‑away‑from‑home allowance. > Note: Assume that a bankrupt living away from their family is given a living‑away‑from‑home allowance of $220 a week. Of this amount, $100 represents reasonable compensation for the costs of accommodation (i.e. the “exempt accommodation component” is $100), and $80 represents reasonable compensation for the cost of food. > Note: The remaining $40 is compensation for the disadvantage of living away from home in a town where facilities that would be available at home are not available. > Note: Under subsection 31(2), the exempt food component is $80 minus $42 (i.e. the compensation for increased food cost less the deducted home consumption expenditure). The value of the benefit is: > Note: $200 ‑ $100 ‑ ($80 ‑ $42) = $62 11 Sub‑subparagraph 32(b)(ii)(B) 12 Paragraph 32(c) 13 Section 36 #### 36 Taxable value of board fringe benefits Subject to this Part, the value of a board fringe benefit is: (a) in relation to a contribution assessment period beginning: (i) on 1 July 1992; or (ii) during the year beginning on 1 July 1992; $1; and (b) in relation to a later contribution assessment period—a sum worked out according to the formula:  CPI is the increase in the All Groups Consumer Price Index number that is the weighted average of the 8 capital cities published by the Australian Statistician in respect of the period that commences on 1 July 1992 and ends immediately before the start of the financial year in which the contribution assessment period commences. 14 Section 37 15 Division 11 of Part III Repeal the Division. 16 Section 46 #### 46 Contribution assessment period in which residual fringe benefits are to be assessed A residual benefit that is provided during a period which extends over 2 or more contribution assessment periods is subject to assessment for income contribution in each of those periods. 17 Sections 48 and 49 18 Section 50 #### 50 Value of residual fringe benefits Subject to this Part, the value of a residual fringe benefit in relation to a contribution assessment period is the cost to the provider of providing the benefit, reduced by the amount of the recipient’s contribution. 19 Section 51 20 Divisions 14, 14A and 14B of Part III Repeal the Divisions. 21 Subsection 136(1) > contribution assessment period has the meaning given by section 139K of the Bankruptcy Act 1966 as in force from time to time. 22 Subsection 136(1) (definition of family member) > family member, in relation to: (a) a benefit provided to an employee, or to an associate of an employee, means: (i) the employee; or (ii) the spouse of the employee; or (iii) a child of the employee; and (b) a benefit provided to a bankrupt, or to an associate of a bankrupt, means: (ii) the spouse of the bankrupt; or (iii) a child of the bankrupt;’. 23 Subsection 136(1) (definition of fringe benefit) > fringe benefit, in relation to a bankrupt, in relation to a contribution assessment period, means a benefit provided at any time during the period by any person to the bankrupt, other than: (a) a benefit provided to the bankrupt by the bankrupt’s spouse under, or because of a genuine maintenance agreement between the spouses; or (b) a benefit provided under a maintenance order, within the meaning of the Bankruptcy Act 1966 as in force from time to time; or (c) the benefit of an order by a court in favour of the bankrupt in respect of costs of litigation; or (d) educational expenses paid by any person in respect of a child of: (ii) the bankrupt’s spouse; or (e) the amount of a refund, or part of a refund, due by the Commissioner to the bankrupt under a law of the Commonwealth, being an amount that the Commissioner has lawfully offset against a tax liability, within the meaning of the Taxation Administration Act 1953 as in force from time to time, of the bankrupt; or (f) subject to subsection (1A), a benefit of a kind referred to in paragraphs (f) to (p) (inclusive) of the definition of fringe benefit in this Act (in its unmodified form) as in force at the beginning of 1 July 1992; or (g) support by way of one or both of the following: (i) lodging (including any board); (ii) occasional use of a motor vehicle used for domestic purposes; up to a value of $250 a week, if the support is provided by a person in the person’s principal place of residence, and the person is: (iii) a close relative; or (iv) a brother or sister (including a half‑brother, half‑ sister, adoptive brother or adoptive sister); of the bankrupt. > Note: Close relative, in relation to a person, is defined in section 136 of the Fringe Benefits Tax Assessment Act 1986 as: (a) the spouse of the person; or (b) a child or parent of the person; or (c) a parent of the person’s spouse. 24 After subsection 136(1) (1A) For the purposes of paragraph (f) of the definition of fringe benefit in subsection (1), paragraph (h) of the paragraphs referred to in that paragraph has effect as if “the employee, or by a relative of the employee,” were omitted and “the bankrupt” substituted. Schedule 3—Modifications in relation to Part X of the Act Part 1—Modifications of Part X of the Act—joint debtors Note: See section 58. 1 Section 187A Omit “This Part”, substitute “(1) This Part”. 2 At the end of section 187A Add: (2) In the application of this Part (other than subsection 187(1A)) to joint debtors, whether partners or not, an expression specified in one of the following rules of interpretation applies to the extent that the context reasonably permits: (a) “a debtor” is to be read as “joint debtors”; (b) “the debtor” is to be read as “the joint debtors”; (c) “the debtor’s” is to be read as “the joint debtors”; (d) if used in relation to a debtor: (i) “he or she” is to be read as “they”; and (ii) “his or her” is to be read as “their”; and (iii) “him or her” is to be read as “them”; and (iv) a noun or verb in the singular form is to be read as being in the plural form. (3) Subsection (2) applies, subject to any specific modifications of this Part by the Bankruptcy Regulations 2021. (4) To the extent that the context reasonably permits, a reference (by operation of subsection (2)) to joint debtors includes a reference to any of the joint debtors. (5) A reference to the affairs, or examinable affairs, of a debtor includes a reference to the separate affairs, or separate examinable affairs, of a joint debtor. 3 Subsection 188(1) Omit “A debtor”, substitute “If each joint debtor is a person”. 4 Subsection 188(1) Before “may sign”, insert “the joint debtors”. 5 Subsections 188(2AA) and (2AB) 6 Subsections 188(2C) and (2D) Omit “the debtor” (second occurring), substitute “each joint debtor”. 7 Subsection 188(4) Before “debtor”, insert “joint”. 8 Paragraph 188A(2)(a) Omit “the debtor’s property (whether or not already owned by the debtor when he or she executes the agreement)”, substitute “each joint debtor’s property (whether or not already owned by that joint debtor when the joint debtors execute the agreement)”. 9 Paragraph 188A(2)(c) Omit “the debtor’s income (whether or not already derived by the debtor when he or she executes the agreement)”, substitute “each joint debtor’s income (whether or not already derived by that joint debtor when the joint debtors execute the agreement)”. 10 Paragraphs 188A(2)(e) and (l) 11 Subsection 189AB(1) Omit “When the debtor’s property becomes subject to control under this Division, the debtor’s property is charged with”, substitute “When the property of joint debtors becomes charged under this Division, the charges specified in subsection (1A) are created with respect to”. 12 After subsection 189AB(1) (1A) The charges are: (a) a charge over the joint property of the joint debtors; and (b) a separate charge over the separate property of each joint debtor. 13 Subsection 189AB(2) Omit “the charge is not affected”, substitute “none of the charges is affected”. 14 Subsections 189AB(3) and (4) Omit “The charge”, substitute “Each charge”. 15 Paragraph 189A(1)(a) (a) summarising and commenting on the information about: (i) the joint estates of the joint debtors; and (ii) the separate estate of each joint debtor; that is available to the controlling trustee; and 16 Subsection 219(2) (2) For the purposes of subsection (1), the prescribed official name is “The Trustee (or Trustees) of the Property of (names of debtors), joint debtors”. Part 2—Modifications of Part VIII of the Act—controlling trustees and trustees of personal insolvency agreements Note: See section 63. 17 Before Division 1 of Part VIII ### Division 1A—Interpretation #### 154A Interpretation In this Part, in its application to Part X, a reference to a registered trustee includes a reference to a controlling trustee and a trustee of a personal insolvency agreement. 18 Section 156A 19 Subsection 157(1) (a) the Official Trustee is: (i) under section 188 or 192, the controlling trustee in relation to a debtor; or (ii) under Part X, the trustee of a personal insolvency agreement; and (b) the creditors wish to appoint, in place of the Official Trustee: (i) a registered trustee or a solicitor as the controlling trustee; or (ii) a registered trustee as the trustee of the personal insolvency agreement; the creditors may do so by resolution at a meeting of creditors. 20 Section 158 #### 158 Appointment of 2 or more controlling trustees The creditors may appoint 2 or more controlling trustees jointly, or jointly and severally. 21 Section 159 22 Section 160 #### 160 Vacancy in position of trustee—Official Trustee to act If at any time there is no controlling trustee in relation to a debtor, or no trustee of a personal insolvency agreement under Part X, the Official Trustee is to act as the trustee. 23 After subsection 161(1) (1A) This section does not apply in relation to a trustee of a personal insolvency agreement. 24 Section 180 Omit “trustee of an estate”, substitute “trustee, other than controlling trustee, under Part X”.