Edited version of your written advice

Authorisation Number: 1051253960790

Date of advice: 18 July 2017

Ruling

Subject: Motor vehicle expenses

Questions and answers

Are you entitled to a deduction for home to work travel?

No.

This ruling applies for the following period:

Year ended 30 June 2017

The scheme commenced on:

1 July 2016

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 are a professional.

You use your own car to carry out your work duties.

You travel from your home to work and from work to home on a daily basis with no work related stops on the way.

You carry a folder with relevant material with you in the car at all times.

You are required to use your car to carry out your work duties.

You have to drive your car to work in order to be able to use it to carry out your work duties.

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) deals with general deductions and allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature.

A deduction is generally not allowable for travel between home and a regular place of work as this travel is not undertaken in the course of producing your assessable income and is private in nature. The cost of travelling between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties.

Taxation ruling 98/6 (TR 98/6) sets out what a professional can and cannot claim as a deduction.

The commentary on travel between home and work is set out in paragraphs 142-144 of TR 98/6 and clearly states that home to work travel is not deductable under section 8-1 of the ITAA 1997 for real estate agents and workers as the travel is private in nature and the principal is not altered if incidental tasks are performed between home and work. The fact that the travel is outside normal working hours or involves a second or subsequent trip does not change this principle either.

The High Court considered travel expenses incurred between home and work in Lunney's case. Williams, Kitto and Taylor JJ stated that (at CLR 498-499;

ATD 412-413; ALR 234-235):

'The question whether the fares which were paid by the appellants are deductible under s.51 should not and, indeed, cannot be solved simply by a process of reasoning which asserts that because expenditure on fares from a taxpayer's residence to his place of employment or place of business is necessary if assessable income is to be derived, such expenditure must be regarded as "incidental and relevant" to the derivation of such income ... But to say that expenditure on fares is a prerequisite to the earning of a taxpayer's income is not to say that such expenditure is incurred in or in the course of gaining or producing his income'.

The Commissioner understands your argument that you need to drive your car to work in order to use it at work for work duties, however this enables you to commence your duties at work and you are travelling to work not on work during these times. Therefore the travel between your home and work is not an eligible deduction under section 8-1 of the ITAA 1997.

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