Edited version of your private ruling

Authorisation Number: 1012536534420

Ruling

Subject: Meals and accommodation

Question

Are you entitled to a deduction for meals and accommodation you incurred in undertaking a training course?

Answer

No

This ruling applies for the following period

Year ended 30 June 2013

Year ending 30 June 2014

The scheme commenced on

1 July 2012

Relevant facts

You signed a contract for a cadetship.

A condition of this cadetship was that you were required to undertake a fulltime training course in City A.

A further condition of employment is that you be accommodated and partake in meals at the training facility.

The duration of this course is xx weeks.

A travel allowance has not been provided for meals and accommodation and you have to pay these expenses yourself.

At the conclusion of the training you will be returning to your home in City B.

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 in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. Generally, a deduction is allowable for self-education expenses if a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge, and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge in their current employment.

TR 98/9 also explains the types of expenses that can be claimed in relation to self education. Paragraph 88 of this ruling explains that ordinarily expenses associated with accommodation and meals have the character of a private or domestic expense. However, expenses such as travel, accommodation and meal expenses incurred are deductible where a taxpayer is away from home overnight in connection with a self-education activity. They are part of the necessary cost of participating in a study tour or attending a conference or seminar or the educational institution. The Commissioner does not consider such expenditure to be of a private nature because its occasion is the taxpayer's travel away from home on income-producing activities.

However, where a taxpayer who has travelled to another location for self-education purposes and has established a new home, these expenses are not allowable under section 8-1 of the ITAA 1997.

Paragraph 93 of TR 98/9 lists the key factors to be taken into account when determining whether a new home has been established. They include:

· the total duration of the travel

· whether the taxpayer stays in one place or moves frequently from place to place

· the nature of the accommodation, for example hotel, motel or long term accommodation

· whether the taxpayer is accompanied by his or her family

· whether the taxpayer is maintaining a home at the previous location while away, and

· the frequency and duration of return trips to the previous location.

There is no one single factor or test which can determine whether or not a new home has been established, each case needs to be determined by its own facts and individual circumstances.

In your case a condition of your cadetship is you must undertake a xx week fulltime prescribed course of education. A further condition of employment is that you be accommodated and partake in meals at the training facility.

In view of the considerable length of time at the training facility, the long term nature of the accommodation and that you stayed in one place for the duration of the training, it is considered that you have established a new home whilst you are undertaking the training in City A. Also you do not maintain a home in City B as you live with your parents and only travel home as frequently as your training schedule permits.

Therefore you are not entitled to claim a deduction for expenses relating to accommodation and meals. In these circumstances, the expenditure is private in nature and not allowable under section 8-1 of the ITAA 1997.