| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1012336776111
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: Medical examination expenses
Question
Are you entitled to claim a deduction for the cost incurred in obtaining a medical certificate?
Answer
No
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You applied for a job with a new employer.
There were various stages to the application process and candidates for the job could only advance if they are successful at each stage prior.
The last stage of the application process was a medical examination.
You were informed by your new employer that your application for employment was successful, subject to a satisfactory medical certificate.
On production of this certificate were able to commence employment.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. You cannot claim a deduction if the loss or outgoing is of a capital, private or domestic nature.
For a deduction to be allowed there must be sufficient nexus between the loss or outgoing and the assessable income. The expense must give rise to or help produce assessable income for it to be deductible.
In TD 93/112 the Commissioner adopted the reasoning of Hill J in FC of T v Cooper (1990) 21 ATR 525; 90 ATC 4580, in that an employers requirement that an employee incur expenditure which is not related to the income-producing activities of that employee, does not convert the expenditure into a deductible outgoing.
In your case you had applied for a job with a new employer and you were required to undergo a medical examination as the last stage of your application process.
As the examination was conducted before you began employment, the costs were incurred in obtaining employment rather than incurred in gaining or producing your assessable income. The expense is therefore not deductible.