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Edited version of private ruling
Authorisation Number: 1011706091706
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Ruling
Subject: Whether relocation expenses are deductible
Question
Are you entitled to a deduction for the expenses of relocating to take up new employment?
Answer
No
This ruling applies for the following period:
Year ended 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You migrated from the Country A to Australia sometime in the 2009-2010 income year to take up a new job.
You commenced your new job a few weeks after you had migrated.
You incurred relocation expenses before commencing your new job. These relocation expenses were expenses associated with the sale of your property in Country A, shipping of personal effects, airline expenses, pet relocation and pet quarantine costs.
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 or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income except where the loss or outgoing is of capital or is of a capital, private or domestic nature.
Taxation Ruling IT 2481 provides that where a taxpayer voluntarily transfers employment from one locality to another and incurs expenditure in moving from one place of residence to a new place of residence to take up the duties of the new position, that expenditure is not incurred in gaining or producing assessable income and is not deductible.
Applying IT 2481 your circumstances, it is concluded that your relocation expenses are inherently private in nature and therefore not deductible under section 8-1 of the ITAA 1997.