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Edited version of your written advice
Authorisation Number: 1012722595384
Ruling
Subject: Deduction for motorised wheelchair
Question
Are you entitled to a deduction for the costs of a motorised wheelchair?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts
You are an invalid who requires a motorised wheelchair.
You are unable to drive a car or walk at all.
You are employed.
Most of your work is completed in your office.
As you are unable to drive/walk or catch a bus, you get to work via a disability Taxi.
You are totally dependent your wheelchair and are unable to actually work without it.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 broadly allows a deduction for any losses or outgoings to the extent to which they are incurred in gaining or producing assessable income except to the extent outgoings are of a capital, private or domestic nature.
The courts have considered the meaning of 'incurred in gaining or producing the assessable income'. In Ronpibon Tin NL Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; 56 ALR 785; 8 ATD 431 the High Court stated that
'For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing the assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing assessable income" mean in the course of gaining or producing such income.'
Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or because it is not an expense incurred in gaining or producing assessable income.
The expenditure must therefore be related to the production of assessable income.
The purpose of the motorised wheelchair is to transport you to work rather than in carrying out your duties that produce your assessable income.
While we acknowledge your specific circumstances, the cost involved in getting to work is considered to be private in nature. Furthermore, the cost of the wheelchair is incurred to overcome restrictions relating to your medical condition. Accordingly, the expenses are not deductible because they were not incurred in gaining or producing assessable income and are also private in nature.