Edited version of private ruling

Authorisation Number: 1011662747721

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Ruling

Subject: Work related expenses - other

Are you entitled to a deduction for a wheel chair and mobility scooter that you purchased for work purposes?

No.

This ruling applies for the following period

For the year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts and circumstances

You have severe mobility problems and use either a wheel chair or a mobility scooter to gain access from the front door of your place of employment to your work station.

You initially used a wheel chair that required another officer to push your wheel chair to where you were going and you then purchased a second hand mobility scooter.

You use and store the wheel chair and mobility scooter for work only.

The wheel chair cost $450.

The mobility scooter cost $950.

Assumptions

You regard these expenses as incurred during the earning of your income and therefore are tax deductible.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1997 Section 25-10.

Reasons for decision

Detailed reasoning

Under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) you can deduct from your assessable income any expenses that are incurred in earning your income. However, a deduction will be denied under the exception provisions of section 8-1 of the ITAA 1997 if the expense is, among other things, of a private or domestic nature.

The courts have considered the meaning on 'incurred in gaining or producing assessable income'. In Ronpibon Tin N.L.Tongkah Compound N.L. v. Federal Commissioner of Taxation (1949) 78 CLR 47; (1949) 8 ATD 431; (1949) 4 AITR 236 the High Court stated that:

For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing the assessable income" mean in the course of gaining or producing such income.

Medical expenses have no direct connection to the gaining or producing of assessable income. The purpose of the expense is to return the taxpayer to health. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is too remote.

In addition, medical expenses can be characterised as being of a private nature and therefore can also be excluded on that ground.

IT 2217 states where taxpayers are required to use medical device or surgical appliances the expenditure would normally qualify under tax offset on net medical expenses.

In considering the expenses under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), a tax offset is available to a taxpayer whose net medical expenses in the year of income exceeds $1,500. The amount of the tax offset is 20% of the excess over $1,500.

While we accept that you may not have purchased the wheel chair and mobility scooter if not for the need to get to your desk, it was not a condition of employment to use this medical appliance. It was for your advantage and benefit and not incurred in carrying out your employment duties.

Therefore, a deduction in respect of the wheelchair and mobility scooter is not allowable. They are of a private or domestic in nature. They are medical devices to overcome a physically disability. This expenditure qualifies as a medical expense for medical tax offset purposes but not an allowable deduction.