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Edited version of your private ruling
Authorisation Number: 1012444578978
Ruling
Subject: Vehicle expenses
Question
Are you entitled to a deduction for the depreciation and associated costs for the upkeep of your vehicle while working interstate?
Answer
No
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You were residing with your parents in law.
During the year you and your spouse travelled around Australia.
In the last few months of your holiday, you worked interstate.
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.
The issue of expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location was considered in FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 (Toms' Case).
In Toms' Case, the taxpayer was a forest worker who during the working week lived in a caravan in a bush camp 108 kilometres from his family home in Grafton. He claimed it was too far to travel each day to his work in the forest, so that it was necessary to establish a caravan at the camp. He would return home on weekends. He claimed the costs of maintaining his caravan and other living expenses such as the cost of heating and lighting. The Federal Court held that the expenses incurred in relation to the temporary accommodation near the workplace while maintaining a family residence in another location were dictated not by his work but by private considerations, and therefore were not deductible.
In your case, you have incurred expenses to enable you to work in a different city to where your principal residence is.However, as in Toms' Case, the expenses are a prerequisite to the earning of assessable income. They are incurred in order to enable you to earn income but are not incurred in the course of gaining or producing that income. They are living expenses and have been incurred for private and domestic purposes. Furthermore, as you were on holidays, the place you were staying is considered to be your residence for the period and you were not considered to be living away from home.
A deduction is therefore not allowable for the depreciation and associated costs for your vehicle.