ATO Interpretative Decision
ATO ID 2001/615
Income TaxDeductibility of travel insurance
FOI status: may be released
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Status of this decision: Decision Current
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the taxpayer entitled to a deduction for travel insurance under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997).
No. The taxpayer is not entitled to a deduction for travel insurance under section 8-1 of the ITAA 1997 as the expenditure is private in nature.
The taxpayer was granted an International Teaching Fellowship in Canada.
The taxpayer incurred expenses for airfares and travel insurance.
Reasons for Decision
Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.
In Case T78 86 ATC 1094 the Administrative Appeals Tribunal allowed a deduction to a barrister for airfares to attend a work-related course. However, the Tribunal held that his claim for travel insurance was expenditure of a private and domestic nature. Expenses such as insurance policies invariably cover items that are generally private in nature, for example illness, loss of baggage, and theft or damage to belongings.
The taxpayer is therefore not entitled to a deduction for travel insurance under section 8-1 of the ITAA 1997 as the expenditure is private in nature.Date of decision: 23 July 2001
Year of income: Year ended 30 June 2000
Income Tax Assessment Act 1997
86 ATC 1094
Overseas travel expenses