ATO Interpretative Decision

ATO ID 2001/297 (Withdrawn)

Income Tax

• This ATO ID is withdrawn as the position stated in this ATO ID is covered by Taxation Ruling TR 1999/10.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Can the taxpayer claim a deduction for the cost of installing security devices in their private home under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

No, the cost of installing security devices in a private home is considered to be of a private or domestic nature and is not deductible under section 8-1 of the ITAA 1997.

Facts

The taxpayer installed security devices in their private home in response to threats against themselves, their home and family.

Reasons for Decision

For an expense to be an allowable deduction under section 8-1 of the ITAA 1997, the expense must be incurred in order to gain or produce assessable income, and it must not be of a capital, private or domestic nature.

In Frankcom v. FC of T 82 ATC 4599; (1982) 13 ATR 636 a Magistrate claimed the cost of fitting security locks to windows and external lighting to the family home. These measures were in response to threats to burn down the family home and threats to his person. Kaye J of the Supreme Court of Victoria notes at 4607; 644 that the enduring benefit provided by these changes to the property rendered the additions capital in nature. However, he also noted that as they were for the protection of his home and family, the expenses were also of a private or domestic nature and thus were not allowable.

In Case T20 86 ATC 211; 29 CTBR (NS) Case 23, the Board noted that the expenditure on improved security measures (radio-controlled garage door, steel security screen doors and deadlocks) incurred by a Family Court judge was properly characterised as both capital and private in nature. While it was a 'once and for all' expense, its purpose was protecting the occupants of the premises - the judge's family. PM Roach (Member) also noted (at 213; 162) that the private character of the expense was retained even where part of the property was used for a substantial proportion of the income producing activities of the taxpayer.

In Case V144 88 ATC 906; (1988) 19 ATR 3880, PM Roach (Senior Member) characterised the following expenditure as private or domestic in nature:

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steel security gates and fencing,

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telescopic aviators,

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wrought iron security screen doors and window grills,

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floodlights,

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electric bell,

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deadlocks and padlocks for perimeter gates and doors,

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security letter box, and

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a guard dog.

He found that the provision of sustenance to security officers (members of the police force) was a common courtesy, however, they were not incurred in the course of deriving assessable income.

Other security devices installed in the home (for example, alarms) will also be characterised as private in nature where the purpose of the device is to protect the occupants of the home.

The security devices installed by the taxpayer in their home to protect against threats to the taxpayer, their home and family are therefore considered to be private and domestic in nature and not deductible under section 8-1 of the ITAA 1997.

Legislative References:
Income Tax Assessment Act 1997
   Section 8-1

Case References:
Frankcom v. FC of T
   82 ATC 4599
   13 ATR 636

Related ATO Interpretative Decisions
ATO ID 2001/48

Keywords
Home office expenses
Private or domestic expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  8 September 2001

ISSN: 1445-2782