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Edited version of private ruling
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Ruling
Subject: Work related expenses
Question
Are you entitled to a deduction for accommodation expenses as your workplace is not close to your primary residence?
Answer
No
This ruling applies for the following periods
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
1 July 2010
The scheme that is the subject of this ruling
You live in place A.
Your employment is in place B.
You rent a unit in place B where stay for the working week and then travel back to your home on your days off.
You do not receive any live away from home allowance from your employer.
You worked in place B for the entire financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Explanation: (This does not form part of the ruling)
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, or relate to the earning of exempt income.
Certain expenditure is 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 you to commence income earning activities (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166).
The accommodation expenses incurred by you enable you to stay in proximity to your work place and arrive at work on time. They are a prerequisite to the earning of assessable income and are not expenses incurred in the course of gaining or producing that income.
Further, the essential character of the expenditure is of a private or domestic nature as it arises due to your choice of where to live and at what distance from work.
You are therefore not be entitled to a deduction for your accommodation expenses under section 8-1 of the ITAA 1997