| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012229460515
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Accommodation Expenses
Question
Are you entitled to a deduction for the cost of your rental expenses for your on site accommodation?
Answer
No
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You are employed at an educational institution and it is a condition of your employment that you live on site.
You are required to live on site so as to be available to students at call.
You live on site fulltime with your spouse and have no other home to go to.
Your employer charges you for the rental of the property and it is paid from your after tax income.
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 except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
As a general rule, the cost of accommodation is not tax deductible, as it is essentially a living expense which is considered to be a private or domestic outgoing (Federal Commissioner of Taxation v. Green (1950) 81 CLR 313; (1950) 9 ATD 142; (1950) 4 AITR 471).
However, where a taxpayer is required by his or her employer to reside for periods of time, away from home and at the work site, and that employee incurs expenditure for the cost of sustenance, the expense takes on the character being business or employment related (Roads and Traffic Authority of NSW v FC of T 93 ATC 4508;(1993) 26 ATC 76).
In your case, you live with your spouse on site in rented accommodation. You have no other home that you are maintaining and so you are not travelling away from home. You have established a home on site.
Even though it is a requirement as part of your employment agreement that you live on site, the essential character of the expenditure is of a private or domestic nature. The accommodation expenses are a prerequisite to the earning of your assessable income and are not expenses incurred in the course of gaining or producing income
Therefore, you are not entitled to a deduction for your accommodation expenses under section 8-1 of the ITAA 1997