52Reduction of taxable value—otherwise deductible rule

52 Reduction of taxable value—otherwise deductible rule

(1) Where: (a) the recipient of a residual fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and (b) if the recipient had, at the comparison time, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure), in respect of the provision of the recipients benefit, equal to the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the residual fringe benefit in relation to the year of tax—a once‑only deduction (in this subsection called the gross deduction) would, or would if not for Divisions 28 and 900 of the Income Tax Assessment Act 1997, have been allowable to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the gross expenditure; and (ba) the amount (in this subsection called the notional deduction) calculated in accordance with the formula: Start formula GD minus RD end formula where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients contribution in relation to the residual fringe benefit—nil; or
(ii) if there is a recipients contribution in relation to the residual fringe benefit equal to, or calculated by reference to, an amount of consideration paid by the recipient to the provider or to the employer in respect of the provision of the recipients benefit—the amount (if any) that would, or that would but for Divisions 28 and 900 of the Income Tax Assessment Act 1997 have been allowable as a once‑only deduction to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of so much of that consideration as was taken into account for the purposes of section 4‑15 or 8‑1 of the Income Tax Assessment Act 1997, if that consideration had been incurred and paid by the recipient at the comparison time;
exceeds nil; and
(c) except where the fringe benefit is:
(i) an exclusive employee residual benefit; or
(ia) covered by a recurring fringe benefit declaration (see section 152A); or
(ii) an extended travel residual benefit; or
(iii) a car residual benefit;
the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients benefit; and
(d) where the fringe benefit is an extended travel residual benefit (other than an international aircrew residual benefit)—the recipient gives to the employer, before the declaration date, a travel diary in relation to the travel undertaken by the recipient to which the fringe benefit relates; and
(da) where:
(i) the fringe benefit is a car residual benefit in respect of a car held by the recipient during a period (in this section called the holding period) in the year of tax; and
(ii) the substantiation rules set out in Division 15 have been complied with in relation to the car in relation to the holding period;
the following conditions are satisfied:
(iii) the recipient gives to the employer, before the declaration date, a car substantiation declaration for the car for the year of tax;
(iv) in a case where the substantiation rules require log book records or odometer records to be maintained by or on behalf of the recipient in relation to the car—the car substantiation declaration is accompanied by a copy of those documents; and
(e) if:
(i) paragraph (da) does not apply; and
(ii) the fringe benefit is a car residual benefit in respect of a car held by the recipient during a period (the holding period) in the year of tax;
the recipient gives a declaration to the employer, before the declaration date and in a form approved by the Commissioner, that purports to set out:
(iii) the holding period; and
(iv) the number of whole business kilometres travelled by the car during the holding period; and
(v) the number of whole kilometres travelled by the car during the holding period;