Edited version of your written advice

Authorisation Number: 1051186901050

Date of advice: 1 February 2017

Ruling

Subject: Work related expenses

Question

Are you entitled to claim depreciation expenses in regard to the exercise equipment?

Answer

No

This ruling applies for the following period:

Year ended 30 June 2017

The scheme commenced on:

1 July 2016

Relevant facts and circumstances

You are a self-employed service provider.

The services you provide involve lifting and moving patients.

You purchased equipment (a piece of weights equipment) to maintain your strength and flexibility.

You are the only person that uses the equipment which is stored and used at your home.

You also use the equipment to photograph exercises you prescribe for patients.

You use the equipment several hours per week.

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 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.

Generally, expenses incurred in the maintenance of physical fitness and well-being are not deductible as they are private and domestic expenditure. Fitness related expenses are deductible where a taxpayer is required to maintain a very high level of fitness, well above the profession's general standard.

In Taxation Ruling TR 95/17 at paragraphs 119 and 119A, an army infantryman was denied a fitness related expense. In contrast, a member of the Special Air Services Regiment (SAS) was allowed a fitness related expense. The rationale being that the SAS member is paid to maintain a very high level of fitness.

Taxation Determination TD 93/114 states that where police duties do not require an officer to undertake regular strenuous physical activity, expenses of keeping fit are not deductible; however, there may be circumstances where such expenditure by a police officer is an essential element of gaining income. It is considered a police academy physical training instructor may be in this category.

FC of T v. Cooper (1991) 21 ATR 1616; 91 ATC 4396 states that the deductibility of an expense depends upon determining the essential character of the expenditure itself and not upon the fact that, unless it is incurred, the taxpayer will not be able to engage in the activity from which his income is derived.

In Case P90 82 ATC 431; (1982) 26 CTBR (NS) Case 24 (Case P90), the taxpayer was a ballet dancer who toured overseas and appealed against disallowed massage expenses. The ballet dancer made a submission that her body was a machine that performed the artistic income producing activity.

The members of the Board applied the argument from Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60; 12 ATD 348; 8 AITR 406, that the expenditure was incidental to the proper execution of her duties and that undergoing the massage treatment was a necessary part of her job.

Your case is able to be distinguished from Case P90 as in that case the body was itself an instrument of artistic performance. In your case you are not a professional performer.

The exercise and expense takes place before or after the earning of your income. They relate to the personal and private person. Exercise equipment can be seen to be of assistance to preparing virtually any worker in any occupation for duty.

Your exercise equipment is a part of a program to maintain your strength and flexibility which is considered to be maintaining a general standard of fitness. Expenditure to maintain a general standard of fitness is expenditure that is private or domestic in nature and is therefore not an allowable deduction under section 8-1 of the ITAA 1997.