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Edited version of your private ruling
Authorisation Number: 1012503538661
Ruling
Subject: Rental - Income
Question
Are the payments you receive for board and lodging from your partner assessable income?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2013.
The scheme commences on:
1 July 2012.
Relevant facts and circumstances
You charge your partner for board and lodging
You and your partner split all other bills equally
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Section 6-10
Income Tax Assessment Act 1997 Section 6-15
Income Tax Assessment Act 1997 Section 6-20
Income Tax Assessment Act 1997 Section 8-1.
Reasons for decision
Taxation Ruling IT 2167 considers the assessability of payments for board and lodging paid by family members and states:
Arrangements of this nature, whether the payment is said to be for board only or for lodging only or for both, are considered to be in the nature of domestic arrangements not giving rise to the derivation of assessable income by the recipient of the payments. It follows that the question of income tax deductions for losses or outgoings does not arise.
In your case, we consider that the payments you receive from your partner are in relation to a domestic or social arrangement rather than a commercial transaction. Consequently they are not included in your assessable income. Any losses or outgoings that you incur are not allowable as tax deductions under section 8-1 of the ITAA 1997 because no assessable income has been produced. This is also confirmed by paragraph 17 of TR IT 2167.