Private ruling: Work related expenses
Published: September 2014
Ruling period: Year ending 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for bottled water you take to a remote worksite in the absence of suitable drinking water? | A1: No

Relevant facts and circumstances: You work on a remote site for a mining company. You take your own bottled water as the site only has desalinated water which you do not consider suitable for drinking. The site is very remote and you work there for weeks at a time before returning home. You do not receive reimbursement or an allowance from your employer for meal and accommodation expenses incurred whilst away from home.

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

Reasons for decision: Summary: Section 8-1 of the 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, or relate to the earning of exempt income. Various court decisions have concluded that, generally, accommodation and food expenses incurred while away from home are essentially 'living expenses' of a private or domestic nature and therefore not deductible ( FC of T v. Cooper 91 ATC 4396; (1991) 21 ATR 1616; FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466). The place where a taxpayer stays whilst working away from home, is considered their usual place of residence for that period. Therefore, the accommodation and meal expenses incurred during that period are private expenditure, and are not deductible under section 8-1 of the ITAA 1997.