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Edited version of private advice
Authorisation Number: 1052183315362
Date of advice: 24 October 2023
Ruling
Subject: Income tax expenses.
Question
Are you entitled to a deduction for the expense you incurred for renting co-working office space in order to perform your duties for your employer?
Answer
Yes, due to compliance reasons it was necessary for you to work from home and your employer doesn't provide you with an alternative place to work from. Therefore, you are entitled to claim a deduction for the expense you incurred for renting co-working office space under Section 8-1 of the Income Tax Assessment Act 1997
Please note - If your employer reimburses you for the expenses you incur, you can't claim a deduction for them.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You commenced employment with your employer on XXXX.
Your employer maintained an office in the city where you lived.
Due to regulatory requirements applying to the industry in which you work, you were unable to work out of the employer's office, due to the nature of your role. However, your employer could not provide you with an alternate office space for you to work from and therefore you were required to work full time from home.
As a result, you established a home office space and completed your full time role from home.
On XXXX, you relocated to another city because of a family illness. There was no change to your work from home requirement and no alternative office space provided by your employer at this location.
The residential rental property you privately obtained in the new city offered no separation between family and work, which was necessary for professional phone calls and client confidentiality.
As a result, you rented co-working office space. This enabled you to meet your compliance and work from home requirements and enabled you to carry out the day-to-day tasks required for your position.
You maintained this office space arrangement for XX months resulting in a rental cost of $XX.
The workspace hire was terminated once approval was gained from your landlord and changes were made to your residential home to ensure you could work from home. You subsequently resumed working from home full time.
Your employer provided confirmation (in writing) that you are required to work from home (due to compliance reasons).
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1