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Edited version of private advice
Authorisation Number: 1051526579845
Date of advice: 6 June 2019
Ruling
Subject: International - salary
Question
Are you entitled to the costs associated with your airfares to Country Y?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 2018
Year ending 30 June 2019
The scheme commenced on:
1 July 2017
Relevant facts and circumstances
You went to Country y in the 2018 income year.
You were on a professional exchange.
Your spouse accompanied you to Country Y.
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) states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. However, you cannot deduct a loss or outgoing to the extent that it is capital, private or domestic in nature.
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).
You incurred expenses associated with your flights to and from country Y to undertake the exchange.
These flights put you in a position to carry out the exchange and the expenses were not incurred in the course of producing your assessable income.
The costs associated with your spouse's flights were not incurred in gaining or producing your assessable income.
Accordingly the expenses are private in nature and therefore not deductable under section 8-1 of the ITAA 1997.