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Edited version of your private ruling
Authorisation Number: 1012492985996
Ruling
Subject: Donations
Question
Are you entitled to claim a deduction for expenses incurred in undertaking volunteer work?
Answer
No
This ruling applies for the following period
Year ended 30 June 2013
The scheme commenced on
1 July 2012
Relevant facts
You and your spouse travelled overseas early this year as part of a project team.
You did not earn any income when doing this work, as it was all volunteer work.
You incurred accommodation, travel and insurance expenses.
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 by an individual in gaining or producing assessable income except where the outgoings are of a capital, private, or domestic natures, or relate to the earning of exempt income.
A number of significant court decisions have determined that, for an expense to satisfy the tests in section 8-1 of the ITAA 1997:
· it must have the essential character of an outgoing incurred in gaining assessable income, or in other words, of an income producing expense
· 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, and
· it is necessary to determine the connection between the particular outgoing and the operations or activities by which you most directly gain or produce his your assessable income.
In your case you voluntarily gave your time and services to a charity. You incurred travel, accommodation and insurance expenses in relation to your voluntary work. You did not receive any assessable income for this work.
Accordingly, the expenditure was not incurred in the course of gaining or producing your assessable income. You are therefore not entitled to a deduction under section 8-1 of the ITAA 1997 for the costs incurred by you.