ATO Interpretative Decision
ATO ID 2001/623 (Withdrawn)
Income Tax
Travel Expenses - attending medical appointments while receiving Workcover paymentsFOI status: may be released
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This ATO ID is withdrawn as the current ATO position on this issue is contained in ATO ID 2012/73This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Issue
Is the taxpayer, a workers compensation recipient, entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for expenditure incurred in travelling to attend medical appointments?
Decision
No. The taxpayer, a workers compensation recipient, is not entitled to a deduction under section 8-1 of the ITAA 1997 for expenditure incurred in travelling to attend medical appointments as this is private expenditure.
Facts
The taxpayer is receiving weekly workers compensation payments as a result of a work related injury.
The taxpayer must travel to various medical appointments as directed by the workers compensation payer and is required by law to attend these appointments.
If the taxpayer does not attend the appointments, the weekly payments may cease.
The taxpayer incurs travel expenses in going to the appointments.
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 order to satisfy the requirements of section 8-1 of the ITAA 1997 there must be a close and immediate connection between the income and the expenditure incurred. The expenditure must be incurred 'in the course of' gaining or producing the assessable income (Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478).
The travel expenses incurred by the taxpayer in attending the medical appointments were not incurred in the course of gaining or producing the assessable income and therefore the taxpayer is unable to establish the required connection between the travel and the receipt of the compensation payments.
In addition, seeking medical treatment or advice is inherently a private matter and expenses that a taxpayer may incur in relation to seeking that treatment or advice are of a private nature. Private expenses such as these are excluded from a deduction that may otherwise be allowable under section 8-1 of the ITAA 1997.
Therefore the taxpayer is not entitled to a deduction for expenditure incurred in travelling to medical appointments under section 8-1 of the ITAA 1997.
Date of decision: 15 August 2001Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Case References:
Lunney v. Federal Commissioner of Taxation
(1958) 100 CLR 478
ATO ID 2001/36
Keywords
Deductions & expenses
Motor vehicle expenses
Travel expenses
ISSN: 1445-2782
| Date: | Version: | |
| 15 August 2001 | Original statement | |
| You are here | 31 August 2012 | Archived |
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