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Edited version of your written advice
Authorisation Number: 1051322327869
Date of advice: 19 December 2017
Ruling
Subject: Residency for Australian taxation purposes
Question 1
Are the travel expenses between your home and State B an allowable deduction?
Answer
No
Question 2
Are the accommodation expenses in State A an allowable deduction?
Answer
No
This ruling applies for the following periods:
Year ending 30 June 201Y
The scheme commences on:
1 July 201X
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You live in State A
You are employed in State B
You travel to State B each week and return home to State A at the end of the week
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Detailed reasoning
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 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.
The expenditure related to the travel between an employees’ home and their normal place of work is considered to be a private expense. The cost of travelling between the home and workplace is generally incurred to put the employee in a position to perform their duties rather than in the actual performance of those duties.
The fact that certain expenditure, such as travelling to work, must be incurred in order to be able to derive assessable income, does not necessarily mean that the expenditure is incidental and relevant to producing the assessable income. It is a prerequisite to the earning of assessable income rather than being incurred in the course of gaining or producing that income.
The essential character of the travel to and from work is that of a private and domestic nature, related to personal and living expenses as part of the taxpayer's choice of where to live, in choosing to live away from and what distance from work.
The expenses you incur for the travel between your home and work are private in nature. Therefore, you are not entitled to a deduction for these expenses under section 8-1 of the ITAA 1997.
Likewise, where accommodation, meal and incidental expenses are incurred by an employee in relocating to a place of work or in living away from home to work, these expenses are a prerequisite to the work and therefore of a private nature and not deductible.