Private ruling: Work related expenses - travel
Published: February 2013
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to claim a deduction for travel expenses? | A1: No

Relevant facts and circumstances: You work in one part of the state and your home is in another part of the state and your spouse and children live there. You receive free board in return for boarding duties and travel to your home on weekends and holidays to be with your family. You will incur costs for between one part of the state where you work and another part of the state where your home is situated. You do not receive any allowances and your family will join you in the following year.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature. Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless a person arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166 ( Lunney's Case )). A deduction is, generally, not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel between home and work is generally incurred to put the employee in a position to perform duties, rather than in performance of those duties (see Taxation Ruling TR 95/34). In your case, you incur expenses to travel between your home and your workplace in order to attend work. These expenses are a prerequisite to the earning of assessable income and are not incurred in producing that income. In addition, these expenses are of a private nature and are incurred as a necessary consequence of living in one place and working in another ( Lunney's Case ). Therefore, they are not incurred in gaining or producing your assessable income and are not deductible under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.