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Edited version of your written advice
Authorisation Number: 1012723399277
Ruling
Subject: Dog
Question
Are you entitled to a deduction for the costs associated with a dog that you take to work for demonstration and handling purposes?
Answer
No.
This ruling applies for the following period
1 July 2009 to 30 June 2014
The scheme commenced on
1 July 2013
Relevant facts
You are a teacher.
You use your dog for demonstration and handling purposes.
When not at work, the dog lives with you at your residence.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Reasons for decision
In order to be deductible under section 8-1 of the Income Tax Assessment Act 1997, expenditure must have the essential character of an outgoing incurred in gaining assessable income. This principle was considered in Lunney & Anor v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404 where it was held that 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 the expenditure must not be capital, private or domestic in nature.
A dog is ordinarily considered a pet and therefore expenses incurred in relation to a dog are generally not deductible as they are private or domestic in nature.
However, in some instances a dog is considered a working beast or item of plant for a business, for example, a guard dog used to provide security for business premises and remains on site at all times and a working dog used to muster stock.
In your case the dog is taken to work with you for demonstration and handling purposes but at all other times is a pet that resides with you.
On balance, we consider that the costs incurred in relation to your dog are essentially private in nature. A deduction for these expenses is therefore not allowable.