Private ruling: Work related expenses
Date of advice: 4 December 2023
Published: 29 January 2024
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for the decline in value for the effective life of the equipment used solely for work purposes? | A1: Yes. Based on the information provided to the Commissioner you are entitled to a deduction for the decline in value of the effective life of the equipment you use for work purposes. The equipment has the relevant connection to the earning of your assessable income. Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a taxpayer may be entitled to a deduction for the decline in value of a depreciating asset that is used during the income year for a taxable purpose. Taxable purpose includes the purpose of producing assessable income under subsection 40-25(7) of the ITAA 1997. Section 40-30 of the ITAA 1997 provides a definition of depreciating assets. They are assets that have a limited effective life and can reasonably be expected to decline in value over the time it is used.

Relevant facts and circumstances: You work as a professional. You have multiple chronic medical conditions and physical disabilities. You purchased equipment to be able to work from home. The equipment is solely used for work purposes and is set up in a separate part of your home, where you carry out the duties of your employment. Your employer has not contributed to the cost of the equipment. You use the equipment when you are performing all the duties required of your employment. You are required to use the bed to carry out your work duties due to multiple chronic medical conditions and physical disabilities. You provided documentation from your treating doctor who recommended the purchase of the equipment as part of the management plan for your medical conditions and disabilities. You are not able to use conventional office equipment to carry out your work duties.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 40-25 | Income Tax Assessment Act 1997 section 40-30