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Edited version of private ruling
Authorisation Number: 1011579989548
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Ruling
Subject: living away from home expenses
1. Can you claim a deduction for the cost of accommodation that is in excess of the living away from home allowance paid by your employer?
No.
2. Can you claim a deduction for personal expenses, such as bedding and television, for use in the accommodation used while living away from home?
No.
Relevant facts and circumstances
Your employment duties require you to work in various parts of Australia that are distant from your home where your family resides.
Your employer pays you a living away from allowance.
You often stay in a hotel or similar accommodation but will rent a house if this type of accommodation is not available or the work will be carried on over long periods of time.
You have incurred accommodation, meal and incidental expenses up to the reasonable amount determined by the Commissioner in TD 2009/15.
You have purchased personal items for use in your accommodation whilst living away from home.
Reasons for decision
Question 1
Section 8-1 of the Income Tax Assessment Act 1997 generally allows a deduction for any loss or outgoing to the extent that it is incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature.
As a general rule, the cost of meals, incidentals and accommodation while working away from home are not allowed as a deduction. Nor is the expense of relocating from the taxpayer's normal residence to accommodation near their workplace.
The place where a taxpayer stays whilst working at a site away from home is considered to be their usual place of residence for that period. These costs are essentially living expenses of a private or domestic nature. The fact that income cannot be earned unless certain expenses are necessarily incurred is not determinative of deductibility.
You incurred accommodation expenses as a result of your normal dwelling being in city A, and working at various sites that are distant from your residence. In these circumstances, the accommodation expenses were incurred to put you in places where you are closer to your places of employment, and are not related to the actual performance of your employment duties.
As the accommodation expenses were not incurred in the course of gaining or producing your employment income and are of a private nature you are not entitled to claim a deduction.
Question 2
The cost of personal items which you have installed in your rented accommodation are also usually private in nature.
As the cost of renting the accommodation whilst you are working away from home is not incurred in the course of gaining or producing your assessable income, so too is the cost of any personal items that you install in such accommodation.
You are therefore not entitled to claim a deduction for any personal items installed in accommodation used whilst working away from home.
Support for these views can be found in various court decisions where it is has been concluded that generally accommodation expenses incurred while working away from home are essentially living expenses of a private or domestic nature and therefore are not deductible (Federal Commissioner of Taxation v. Cooper (1991) 29 FCR 177; 91 ATC 4396; (1991) 21 ATR 1616; FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466).
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