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Edited version of your written advice
Authorisation Number: 1051233928401
Date of advice: 6 June 2017
Ruling
Subject: Travel expenses
Questions and answers
Are you entitled to a deduction for the cost of travelling expenses incurred in attending shareholders meetings?
Yes.
This ruling applies for the following period
Year ending 30 June 2018
The scheme commences on
1 July 2017
Relevant facts and circumstances
You own shares in a number of companies.
You will attend annual shareholder meetings.
You will incur costs for airfares, accommodation and meals.
The trips would be overnight trips within Australia.
You will attend two or three of these meetings per year.
You will attend these meetings so that you can personally ask questions and vote in company ballots.
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.
Taxation Ruling IT 39 considers the deductibility of expenditure incurred in servicing or managing income producing investments. IT 39 states that where expenditure is incurred in 'servicing' an investment portfolio (such as consulting with inter-state stock brokers and attending inter-state stock exchanges), the expenditure should properly be regarded as incurred in relation to the management of income producing investments and thus as having an intrinsically revenue character.
However, Taxation Ruling TR 95/33 provides that where it is concluded that the disproportion between the outgoing and the relevant assessable income is essentially explained by reference to the independent pursuit of some other objective (for example, for private purposes), then the outgoing must be apportioned between the pursuit of assessable income and the other objective (Fletcher v. Federal Commissioner of Taxation (1991) 173 CLR 1; 91 ATC 4950; (1991) 22 ATR 613).
In your case, the travel expenses incurred by you in attending the shareholder meetings are costs incurred in servicing your investment portfolio. However, for any portion of expenses not solely related to attending the shareholder meetings, you will be entitled to a deduction on a proportionate basis.
Consequently, you will be entitled to a deduction for your airfares, accommodation and meals incurred when attending shareholder meetings.
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