Edited version of private ruling

Authorisation Number: 1011757599126

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Ruling

Subject: Deductibility of Skin Treatments

Question

Are you able to claim a deduction for skin treatments?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

Year ended 30 June 2013

The scheme commences on:

1 July 2009

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 performing artist.

Your act requires you to have constant make up applications.

You fly frequently to reach your performance destinations.

You are required to wear heavy applications of stage make up and to maintain an excellent skin condition.

Your skin is exposed to the elements of dehydration due to frequent air travel.

You fly on average one return flight a week. Some weeks you might fly up to three times then the next week not at all.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

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.

Subsection 8-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997), provides that a taxpayer may claim an income tax deduction against assessable income for any loss or outgoing to the extent that the loss or outgoing is incurred in gaining or producing assessable income.

However, subsection 8-1(2) of the ITAA 1997 limits the loss or outgoing by providing that the loss or outgoing cannot be deducted to the extent that it is an amount of capital or is private in nature.

Paragraph 3 of TR 96/18 states that cosmetics and personal grooming expenses include the cost of:

'…perfume, after shave, deodorant, nail polish, nail or hair care products, skin care products, lipstick, foundation and other make-up, hair spray, hair styling, haircuts, hair colouring, hair perm, and other personal care or related products or treatments.'

In your case you have asked if skin treatments are deductible. Skin care products are cosmetic or grooming expenses which are covered in TR 96/18.

The ruling follows the decision of the Federal Court of Australia in Mansfield v. FC of T 96 ATC 4001;1995) 31 ATR 367 (Mansfield's case).

Mansfield's case concerned a flight attendant who was required by her employer to be well groomed, and who was paid an allowance in recognition of this requirement by her employer.

The Federal Court found that the taxpayer's hair dressing and make-up costs were essentially of a private nature which precluded the costs from being allowable as an income tax deduction. Mr Justice Hill stated in his decision that,

'......even if makeup as such is required by the airline as an incident of employment, I am presently of the view that makeup retains an essential personal characteristic which excludes it from deductibility.'

Paragraph 6 of TR 96/18 indicates that where special circumstances exist, a deduction may be allowed for certain grooming expenses. The ruling states:

'…it is possible in special circumstances for there to be a sufficient connection between the expenditure and the income earning activities of the taxpayer.'

Paragraph 13 of TR 96/18 goes on to say:

'A deduction may be allowable for some make-up and hairdressing costs incurred by a performing artist when performing a role. The cost of maintaining a particular hairstyle or length for a role is an allowable deduction. A deduction is allowable for the cost of stage make-up, including cleansing materials to remove stage make-up. A deduction is not allowable for the cost of cleansing materials to relieve skin conditions.'

In Mansfield's case the Federal Court did allow the taxpayer the cost of rehydrating conditioner for her hair and moisturiser for her skin on the basis that such expenditure was necessitated by the lack of humidity in the pressurised environment of an aircraft cabin.

In Mansfield's case, the constant exposure to the extreme low humidity of the pressurised airline cabin had a drying effect on the skin and hair of the taxpayer. In respect of the expenditure on moisturiser and conditioner Mr Justice Hill concluded:

It has the necessary connection with her activities in the cabin itself. It is these activities which are directly relevant to her gaining and producing assessable income by way of salary.

'…the mere fact that a particular expenditure may be required to be made by the employer, while relevant will not be determinative of deductibility. The additional feature in the present case is the fact that the occasion of the expenditure is to be found in Mrs Mansfield's working in the cabin, that is to say, in the dehydration brought about by pressurisation of the cabin at altitude.'

In your case, you are a performing artist. Although you fly frequently to get to your performance destinations, your employment itself is not similar to a flight attendant in that they are working in pressurised cabins at altitude everyday. Also, the skin treatments are general in nature rather than specific make-up or grooming expenses incurred in order to play a particular role. There is no additional feature or special circumstance to make the expenditure on skin treatments an occasion of your work activities.

As a result your expenditure on skin treatments is not an allowable tax deduction. It is a private expense.