| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1012283313677
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: Deductibility of a dog
Question 1
Are you entitled to a deduction for costs related to your dog?
Answer
No.
Question 2
Are you entitled to a deduction for the decline in value of your dog?
Answer
No.
Question 3
If expenses relating to your dog are deductible, are you required to apportion the expenses based on days the dog actually spends on 'guard duty'?
Answer
Not applicable.
This ruling applies for the following period:
Year ending 30 June 2013
The scheme commences on:
1 July 2012
Relevant facts and circumstances
You own a work vehicle and use that vehicle to carry substantial tools.
You own a dog.
Your dog is taken to work with you and remains with the vehicle while you are working to protect your tools and vehicle.
While you are not working, the dog is kept at your residence.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Section 40-25
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.
A dog is ordinarily considered a pet and therefore expenses incurred in relation to a dog are generally not deductible as they are private or domestic in nature and not sufficiently connected to the earning of assessable income. However, in some instances a dog is considered a working beast or item of plant for a business, for example, a guard dog used to provide security for business premises that remains on site at all times and a working dog used to muster stock. An animal does not qualify as plant unless it is used in a business (Case M59, 80 ATC 409 and Case M72, 80 ATC 497).
In your case, the dog is guarding your vehicle, tools and equipment while you are at work but at all other times is a pet that resides with you. On balance, we consider that the costs incurred in relation to your dog are essentially private in nature. Accordingly, you cannot claim a deduction for the costs relating to your dog.
Decline in value
Section 40-25 of the ITAA 1997 allows you to deduct from your assessable income an amount equal to the decline in value of a depreciating asset to the extent that it is used to produce assessable income.
As previously established, your dog is not utilised to produce assessable income, therefore a deduction for the decline in value of the dog is not available.