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Edited version of private advice
Authorisation Number: 1012680590796
Ruling
Subject: Travel
Question
Are you entitled to a deduction for travel expenses?
Answer
No.
This ruling applies for the following periods
Year ended 30 June 2014
Year ended 30 June 2015
Year ended 30 June 2016
The scheme commenced on
1 July 2013
Relevant facts
You live in City A and work in City B on a rotational basis.
You are paid a 'cash in lieu' amount to cover your travel expenses between home and work.
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 the course of gaining or producing assessable income, but are not allowable to the extent that they are of a capital, private or domestic nature.
It is settled law that expenses of travelling to work are not deductible as they are not incurred in gaining the assessable income, but as a pre-requisite to gaining assessable income (Lunney v FC of T; Hayley v FC of T (1958) 100 CLR 478).
In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel that the taxpayer's expenses can be deducted (Taylor v Provan 1975 AC 194).
The mere receipt of an allowance does not entitle an employee to a deduction. Taxation Ruling IT 2543 at paragraph 7 explained that the receipt of an allowance imparts no greater degree of deductibility to an expense which is incurred in relation to that allowance.
In your case, you are travelling to work and the expenditure incurred is not an allowable deduction. It should be noted that the significant distance travelled is irrelevant as the law does not differentiate between, nor apply on the basis of, distances travelled.