Private ruling: Work related expenses
Date of advice: 9 May 2024
Published: 17 June 2024
Ruling period: Year ended 30 June 2023 | Year ending 3 June 2024
Date scheme commenced: 1 July 2022

Ruling: Q1: Are you entitled to a deduction for your airfares to and from Country Z to undertake the Fellowship? | A1: No. | Q2: Are you entitled to a deduction for your family's airfares to and from Country Z? | A2: No. | Q3: Are you entitled to a deduction for your accommodation while participating in the Fellowship in Country Z? | A3: No. | Q4: Are you entitled to a deduction for the General Medical Council (GMC) registration in Country Z? | A4: Yes. | Q5: Are you entitled to a deduction for the British Medical Association (BMA) fees? | A5: Yes. | Q6: Are you entitled to a deduction for the Medical Protection Society (MPS) fees? | A6: Yes. | Q7: Are you entitled to a deduction for the costs associated with obtaining you and your families visa and passports? Along with travel insurance? | A7: No. | Q8: Are you entitled to a deduction for the cost associated with shipping your personal belongings back to Australia? | A8: No.

Relevant facts and circumstances: You are a specialist professional. In your organisation there are subspecialised professionals. Your occupation is a very high-risk area, and there is a small handful of professionals in your State who are part of the subspeciality group. A position was opening in your department due to a planned retirement, and your director discussed with you the possibility of joining this subspeciality group. To be able to join the subspeciality group, it is a requirement that you seek training in a recognised program. In Australia, this training is not available, therefore training abroad is required. Country Z has the required trained available. You went to Country Z to undertake the training over several months. You incurred the following expenses in undertaking the fellowship in the Country Z: • Airfares to and from Country Z for you and your family • Accommodation costs for you and your family • Visa, passport and travel insurance for you and your family • Cost for shipping excess personal items acquired while in Country Z by you and your family back to Australia consisting of clothing, toys, books • Professional fees • Airport transfers at the relevant airports You relocated your spouse and children to Country Z while you undertook the training. You rented accommodation from friends in Country Z. The property was fully furnished. You took clothing and other personal items to Country Z with you. One of your children attended some schooling in Country Z for socialisation purposes. The other children did not attend school due to their age. You lent your property in Australia to friends visiting Australia for the duration of your stay in Country Z. Your friends paid an agreed amount to cover the mortgage and expenses such as utilities. Your friends had full use of the property and you left all your belongings in the house. You were not reimbursed by your employer for any costs associated with the training. You have paid all expenses out of your own pocket. You joined the subspeciality group in the month you returned to Australia.

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

Reasons for decision: Summary: Work-related expenses generally fall for consideration under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). This section allows a deduction for losses and outgoings which are incurred while gaining or producing assessable income, unless the losses or outgoings are of a capital, private or domestic nature. The Commissioner's view on the deductibility of self-education expenses is contained in Taxation Ruling TR 2024/3 Income tax: deductibility of self-education expenses . In accordance with TR 2024/3, expenses of self-education will satisfy the requirements of section 8-1 of ITAA 1997 if: • a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge, and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge ( FC of T v. Finn (1961) 106 CLR 60;(1961 12 ATD 348) (Finn's Case); or • the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from their current income earning activities in the future ( FC of T v. Hatchett (1971) 125 CLR 494; 71ATC 4184; (1971) 2ATR 557 (Hatchett's Case). Therefore, provided there is sufficient connection between a course of self-education and current income earning activities, you are entitled to claim a deduction for your self-education expenses. However, self-education expenses will not be deductible if the study is intended to: • enable you to get employment • enable you to obtain new employment, or • to open a new income-earning activity (whether in business or in your current employment). | Detailed Reasoning - Application to your circumstances: The Commissioner is satisfied that the XXXXXXX Fellowship you attended in Country Z has the relevant connection with your employment as a XXXXXXX in Australia. As you were living in Country Z with your family for the duration of your fellowship, you are not entitled to a deduction for your airfare to and from Country Z as it is a private and domestic expense. You are not entitled to a deduction for your spouse and children's airfare as these are private and domestic in nature. You are entitled to a deduction for the professional fees you paid in Country Z. You are not entitled to any accommodation expenses as these are private in nature as you relocated to Country Z for the duration of the training in Country Z. The accommodation is private as it enabled you to be in close proximity to the XXXX to be able to attend the training. You are not entitled to a deduction for the costs associated with you and your families visa, passport or travel insurance as these are private and domestic in nature. You are not entitled to the airport transfers as you were arriving in Country Z from a holiday and you left Country Z to go on holiday these expenses are private and domestic in nature.