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Ruling

Subject: Travel expenses

Question

Are you entitled to a deduction for the travel expenses incurred in travelling overseas as a chaperone on a school trip?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2012

Year ended 30 June 2013

The scheme commenced on:

1 July 2011

Relevant facts and circumstances

You are employed as a personal assistant at a school.

The school has organised a school trip for its students and has sought volunteers from its staff to act as chaperones for the students during the trip.

You are required to take annual leave while on the trip.

You are paying all travel expenses yourself including airfares and accommodation.

The purpose of the trip is to act as chaperone for the students and you will be on-call at all times for this purpose.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision

Summary

You are not entitled to a deduction for the travel expenses you incur as they do not have the required connection to your income producing activities.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that in order for a loss or outgoing to be deductible, there must be a connection between the expense and the gaining or producing of assessable income. However, a deduction cannot be claimed for a loss or outgoing that is of a private or domestic nature.

A deduction is only allowable under the 'general deduction' provision if the expense is actually incurred, has a relevant connection with earning income and meets the substantiation rules.

Taxation Ruling TR 98/9 states that an expense is deductible under section 8-1 when it has the essential character of an income producing expense. The essential character is to be determined by an objective analysis of all the surrounding circumstances.

There must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income (Ronpibon Tin NL & Tongkah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; (1949) 8 ATD 431), and the expenditure must not be capital, private or domestic in nature.

Taxation Ruling TR 95/14 provides that a deduction is allowable for costs incurred by a teacher when accompanying students on excursions, educational and sporting trips and camps only if these trips are undertaken by a teacher in the course of gaining assessable income and they are not private, domestic or capital in nature.

You are currently employed as a personal assistant at a school. You volunteered to chaperone students of the school on a school trip overseas. You were required to take annual leave in order to take part in the trip and pay all travel expenses yourself. While we accept that you will be chaperoning children from the school where you work, the trip lacks the required connection to your income producing activity as a personal assistant. You went on the trip purely in a private capacity acting as a chaperone for the school.

Therefore, your overseas travel expenses are considered not to have been incurred in earning your assessable income. They are considered to be private in nature and hence are not deductible under section 8-1 of the ITAA 1997.