Edited version of private advice

Authorisation Number: 1052289764990

Date of advice: 14 August 2024

Ruling

Subject: Income tax deductions

Question 1

Will the fitness costs incurred by you such as gym membership, personal trainer and exercise equipment be allowed as a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No.

Question 2

Will the streaming service costs incurred by you be allowed as a deduction under section 8-1 of the ITAA 1997?

Answer

No.

This ruling applies for the following period:

Income tax year ending 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts and circumstances

The taxpayer is an Australian performing artist on a television series.

The taxpayer's employment contract states that the performing artist is expected to wear certain clothing during the shooting of the television series and the performing artist is expected to maintain a high level of fitness for the duration of the contract.

The taxpayer incurs expenses such as Gym Membership, Personal Trainer and Exercise Equipment at their own expense.

The taxpayer does paid work for various organisations within the nutrition and beauty industries.

The taxpayer is required to research different acting techniques and styles through streaming services online.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Question 1

Summary

The costs incurred by you for fitness expenses such as gym membership, personal trainer and exercise equipment are considered private expenses and are not allowed as a deduction under section 8-1 of the ITAA 1997.

Detailed reasoning

Subsection 8-1(1) of the ITAA 1997 states that you can deduct from your assessable income any loss or outgoing to the extent that:

a)            it is incurred in gaining or producing your assessable income; or

b)            it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income.

However, under subsection 8-1(2) of the ITAA 1997, a loss or outgoing is not deductible to the extent that it is a loss or outgoing that is private in nature.

The Commissioner generally takes the view that expenses incurred in keeping fit are inherently private in nature as it ultimately involves the person's own physical wellbeing.

Taxation Ruling 95/20 Income tax: employee performing artists - allowances, reimbursement and work-related expenses (TR 95/20) states that a deduction is not allowable for the costs of maintaining general fitness or body shape.

The ATO website under QC 51260 Performing artist expenses A-F | Australian Taxation Office (ato.gov.au) further explains:

You can claim a deduction in very limited circumstances, where your role requires you have an extremely high level of fitness. This will be the case where your role requires you to both:

•         maintain an extremely high level of fitness well above the general occupation standard; and

•         perform ongoing strenuous physical activities as an essential and regular part of your role.

Examples are then given of trapeze artists or tumblers working in a circus and a professional ballerina.

As your role does not fall into this category, you cannot claim a deduction.

Question 2

Summary

The costs incurred by you for streaming services are not allowed as a deduction under section 8-1 of the ITAA 1997.

Detailed reasoning

The ATO website under QC 51260 Performing artist expenses P-S | Australian Taxation Office (ato.gov.au) explains that you cannot claim a deduction for the cost of pay television or streaming services such as XXXX or XXXX as these are considered private expenses.