Edited version of private advice

Authorisation Number: 1052291131063

Date of advice: 15 August 2024

Ruling

Subject: Work related deductions

Question 1

Are you able to claim an immediate deduction for the medical, a security clearance, the Industrial organisation membership, the maintenance and upkeep of your XXXX helmet, the instruction hours and currency hours?

Answer

Yes.

It is accepted that it is essential for you to have a XXXX licence in your current employment role.

Your work related expenses and the expenses to upkeep your XXXX licence meet the requirements of deductibility and are deductible in the financial year the expenses are incurred.

Question 2

Can you claim a deduction for the decline in value of the XXXX?

Answer

Yes.

The XXXX, software and subscriptions to software you purchase can be deducted over the useful life of the asset if the cost is more than $300. If the total cost is less than $300, you can claim an immediate deduction in the year the expense was incurred.

This ruling applies for the following periods:

Year ended 30 June 20YY

Year ended 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts and circumstances

You are employed by Company A as an Engineer.

The employer provides services and products related to aircraft.

Integration activities include ground and airborne flight testing.

Part of your employment is to develop and execute XXXX testing. You also develop XXXX.

You have a commercial XXXX licence issued by Entity X that you obtained in 20YY.

You stated the knowledge you gained from obtaining the commercial XXXX licence is directly used in your employment.

You provided a letter from your employer that states:

This letter is to confirm that Person A is employed by Company A at the company's Location A facility in the position of Position A Engineer. Person A commenced employment on DD MM 20YY

Please find enclosed a position description which details their duties.

Considered relevant to Person A's private ruling application with the ATO are the following duties:

•         Development of XXX procedures for XXXX. These are executed by Person A on ground or by a pilot during flight tests.

•         Development of XXXX manual instructions and amendments.

•         Development of new features to be used in XXXX.

Person A's understanding of XXXX flying supports the development and conduct of these tests, and further supports the development of flight manual setup and language. These duties undertaken Person A require a detailed knowledge and understanding of piloting, which Person A has gained from pilot training.

You provided specific examples of how you use your knowledge gained from your pilot's licence in your employment duties such XXXX. These tests are a carried out in a combination of ground testing procedures and flight-testing procedures.

You have incurred costs to upkeep the currency of your pilot's licence to ensure it remains valid and you have also incurred other expenses relating to your employment.

In the year ended 30 June 20YY, you incurred the following expense:

•         An Aviation Medical: This expense is a medical clearance that is required by Entity A. It is a class 1 medical and is valid for 1 year. Pilots and air traffic controllers (ATCs) must hold a current medical certificate to exercise the privileges of their licence.

In the year ended 30 June 20YY, you expect to incur costs of the following:

•         A cost for a security clearance: This is an Aviation Security Identification Card which allows you to access restricted areas of an airport.

•         An Electronic Flight Bag: A subscription-based service that includes maps, hardware and software for navigation and search and rescue for emergency (SARTIME) flight management.

•         A flight helmet: An item of Personal Protective Equipment (PPE). You incurred costs to upkeep the helmet, such as replacing earmuffs and padding and servicing the inbuilt telephone/radio.

•         An XXXX Membership: The XXXX is an industrial organisation and professional association for commercial pilots in Australia.

•         Flight instruction hours: This expense is the hire of a XXXX with an instructor to ensure that you are operating with the correct techniques for safe flight. This is a requirement to maintain your pilot's licence and is valid for a period of X months.

•         Currency hours: This expense is for the hire of a XXXX where you will conduct three take offs and landings every XX days and is a requirement under legislation to maintain currency of your pilots' licence.

You have stated none of the expenses are for private use.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 25-10

Income Tax Assessment Act 1997 section 40-25