| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012770067357
Ruling
Subject: Work related expenses
Question 1
Are you entitled to a deduction for rent, electricity, gas and cleaning?
Answer
No
This ruling applies for the following period:
Year ending 30 June 2013
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
You and your spouse have resided at your residence for a period of time.
You were offered an employment position which is some distance from your residence.
Your employment responsibilities require you to attend events that are held outside of standard business hours. It would be unfeasible for you to undertake a two or more hour commute each day from your residence.
It was not an option to relocate your family closer to your new employment.
Accordingly, you obtained rental accommodation closer to your employment as well as maintaining your residence.
You have incurred expenses in relation to rent, electricity, gas and cleaning.
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, or relate to the earning of exempt income.
Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless one arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166).
The expenses you have incurred enable you to stay in proximity to your work place and arrive at various work related events on time. They are a prerequisite to the earning of assessable income and are not expenses incurred in the course of gaining or producing that income.
Further, the essential character of the expenditure is of a private or domestic nature as it arises due to your choice of where to live and at what distance from work.
You will therefore not be entitled to a deduction for rent, electricity, gas and cleaning expenses under section 8-1 of the ITAA 1997.