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Ruling
Subject: other work related expenses
Question 1
Are you entitled to a deduction for turf in the holding area for the dogs?
Answer
No
Question 2
Are you entitled to a partial deduction for the water tank used in connection to the dogs?
Answer
No
Question 3
Are you entitled to a deduction for the fence erected for the holding area for the dogs?
Answer
No
Question 4
Are you entitled to a partial deduction for the cost of the lawn mower used to maintain the holding area?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
Year ended 30 June 2015
The scheme commences on:
1 July 2008
Relevant facts and circumstances
You are employed as a dog handler.
You have built a specified holding and exercising area for the dogs.
Your employer requires the yard to be fully fenced with 6 foot high fencing, as well as having established grass for the dogs to use.
You have incurred the following expenditure:
· Purchase of turf for the holding area as well as the cost of preparing the land and laying the turf.
· Purchase of a water tank and pump to water the grass in the holding area and wash the dogs, kennel and areas surrounding the kennel.
· Installation of a fence erected for the holding area.
· Purchase of a ride on lawn mower to maintain the holding area.
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, or relate to the earning of exempt income.
Taxation Ruling TR 95/13 explains that a deduction is allowable for expenses incurred by police officers in the maintenance of police dogs. It is considered that there is a direct parallel between a police dog and a dog for your employment and this ruling would therefore apply equally to your circumstances.
Paragraph 159 of the ruling states:
A deduction is not allowable for the cost of installing security fences at a police officers private residence for the security of police dogs, as the expense is both of a capital and private nature.
In your case you have built a holding and exercise area for the dogs.
The fact that you built the holding area at the request of your employer does not alter the deductibility of the expense. In FC of T v. Cooper (1991) 29 FCR 177; 91 ATC 4396; (1991) 21 ATR 1616, a professional footballer was denied the cost of purchasing food and drink. His coach had instructed him to consume additional food so that he would not lose weight during the football season. The character of the expense was private.
Hill J said:
...the fact that the employee is required, as a term of his employment, to incur a particular expenditure does not convert expenditure that is not incurred in the course of the income producing operations into a deductible outgoing.
Therefore, you are not entitled to a deduction for the cost of laying turf and erecting a fence in the holding area for the dogs as the expense is both capital and private in nature. Additionally, the water tank and lawn mower are also capital in nature and therefore not eligible deductions.