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Edited version of your written advice
Authorisation Number: 1012756438812
Ruling
Subject: Accommodation expenses
Question
Will you be entitled to a deduction for rent expenses?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 2015
Year ended 30 June 2016
The scheme commences on:
1 July 2014
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You have been offered a job interstate from where you permanently live for five months.
To accept this offer, you will need to temporarily relocate. You will need to pay for accommodation in your new job location as well as maintain your mortgage repayments for your home during this period.
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 in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
ATO Interpretive Decision ATO ID 2002/616 provides guidance on the deductibility of accommodation expenses for a person living a long distance from their workplace.
Generally, accommodation expenses incurred by an employee who lives away from home to carry out the duties of their employment will not be deductible. Expenses of this nature have been found to be private or incurred before or after the activity of earning assessable income. Meal expenses are also inherently private in nature and generally not deductible.
In FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466, the Federal Court disallowed a forest worker's deduction for the cost of maintaining a caravan and other living expenses. The taxpayer incurred the expenses in providing temporary accommodation at the base camp because the taxpayer had chosen to reside at a place far from the worksite. These expenses were dictated not by work but by private considerations.
In your case, you will incur accommodation expenses while you temporarily relocate for a new job. These expenses are private in nature and therefore not deductible under section 8-1 of the ITAA 1997.
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