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Edited version of private ruling
Authorisation Number: 1011691921759
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Ruling
Subject: Travel Expenses
Question
Are you entitled to a deduction for cost of airfares and car hire for travel between home and work?
Answer
No
This ruling applies for the following period
Year ended 30 June 2009
Year ended 30 June 2010
The scheme commenced on
1 July 2008
Relevant facts
You work for a company.
Your employer has requested you to undertake a project interstate.
The company pays for your accommodation while interstate and provides a couple of flights to return to your home state.
You need a vehicle whilst working interstate and you have driven your own vehicle over to use whilst working.
You have returned to your home state at your own expense to visit family and attend family functions.
On these trips home you have at times needed to hire a car to transport you around.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 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.
Certain expenditure such as travel expenses is often incurred in order to be in a position to be able to derive assessable income (for example, unless one arrives at work it is not possible to derive income). This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities. This was established in the case Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166.
In your case, your home for the duration of your employment is interstate. You travel back to your home state to visit your family and attend family functions on occasions. Travel between your home interstate and your home state is considered to be private in nature as you are not travelling on work but travelling to visit family. As the airfares and car rental expenses while in your home state are considered to be private, you are not entitled to a deduction.