Edited version of private advice

Authorisation Number: 1052060716198

Date of advice: 7 December 2022

Ruling

Subject: Portable building used as home office

Question

Are you entitled to claim a deduction for the depreciation on your portable building used as a home office?

Answer

Yes. Given that you perform 'income-producing activities' from home, you will be entitled to certain deductions. You use the building at your home solely for a taxable purpose and can claim the depreciation to the extent it is not used for private and domestic purposes.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

XX XXX 20XX

Relevant facts and circumstances

You are employed full time and run a business as a sole trader.

Your employer closed their office during the first COVID lockdown and the lease was not renewed. From that point on your employer required you to work from home.

Your employer doesn't have any other offices in Australia for you to work from and your employment contract states that 'your normal place of work will be at home'.

You do not have a spare bedroom in your dwelling to use for work purposes.

You purchased a portable building to use as a home office.

The building is installed at a dwelling that you rent as the tenant. You are renting while you build a house and intend to vacate upon completion of the build which should be early next year.

You use the building solely for work purposes.

The portable building has electricity connected to run lighting, heating/cooling and houses normal office equipment including a desk, computer, monitor etc. Your work activities include typical duties required for your position.

Clients do not attend your office at home.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1997 Section 40-25