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Edited version of your private ruling
Authorisation Number: 1012564935179
Ruling
Subject: Travel, accommodation and meals
Question
Are you entitled to claim a deduction for expenses incurred in training people overseas?
Answer
No
This ruling applies for the following period
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ending 30 June 2014
The scheme commenced on
1 July 2009
Relevant facts
You run a business which provides teaching subjects, training people and writing books.
For several years you have travelled overseas to train people.
You have donated books and you do not earn any income when doing this work, as it is all volunteer work.
You have incurred travel expenses relating to these trips including airfares, accommodation, food, hiring of facilities as well as the travel and meal expenses of the people you are training.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred by an individual in gaining or producing assessable income except where the outgoings are of a capital, private, or domestic natures, or relate to the earning of exempt income.
A number of significant court decisions have determined that, for an expense to satisfy the tests in section 8-1 of the ITAA 1997:
· it must have the essential character of an outgoing incurred in gaining assessable income, or in other words, of an income producing expense
· there must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income, and
· it is necessary to determine the connection between the particular outgoing and the operations or activities by which you most directly gain or produce your assessable income.
In your case you voluntarily gave your time, resources and services to training. You have incurred travel expenses including, airfares, accommodation and food in relation to your voluntary work.
Accordingly, the expenditure was not incurred in the course of gaining or producing your assessable income. You are therefore not entitled to a deduction under section 8-1 of the ITAA 1997 for the costs incurred by you.
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