Hi,

I am currently in Australia on a 417 (WHM) visa and have been offered employment by a company here. (Not an agency, Labour Hire Firm, or Bodyshop).

They have offered to sponsor me on the 457 Visa.

In my offer there is a section on LAFHA and how my Food and Rental costs could qualify as "tax exempt" components.

I have to spoke to them to clarify this LAFHA and basically they have said that it should be no problem as they have done the LAFHA in the past and have had no trouble with it. Fine, but I know that the ATO is tightening up as to who might qualify for LAFHA.

Personally. I don't think I would be entitled to LAFHA because I was already in Australia when I was offered the job. Would I be right in assuming this ? Further, I dont own a home back in the UK and have no mortgage as I was renting back in the UK before I came here.

If my employer was to claim LAFHA for me in my new 457 job would I be to blame for this or would my employer? I ask this because I am aware that the employee has to sign a declaration form confirming that I was required to work away from my usual place of residence in order to carry out the duties of my employment (Which I wasn't because I wasn't employed by them in the UK and then transferred over) so would the onus be on me for untruthfully claiming this and would I then be liable for a bruising from the ATO?

Stories of IT people being landed with a huge tax bill to be paid immediately come to mind here!

On another note, I was thinking of renting in Australia whilst being employed on my 457 and buying a house back in the UK with the intention of renting it out since paying rent here and paying for a mortgage back home is just too much.

Are there any tax implications or any thing else that I should consider in respect of this ?

ANY suggestions, thoughts or advice greatly appreciated.

Thanks.
ACF.

I think the risk sits with the employer as the tax legislation re the LAFHA is dealt with under the Fringe Benefits Tax sections of the tax code - FBT is a tax payable by the employer, not by the employee.

I would put your position in a letter, and would say that if the company is nevertheless happy to pay you a LAFHA as part of your remuneration you would be pleased to receive it. In so doing you put the decision onto the employer.

I'll be happy to formally assist re the tax issues arising when renting out a property if you would like to send me an email.

Best regards.

Thank you for your thoughts Alan.

Rgds.