Private ruling: Accommodation expenses
Published: August 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for accommodation expenses incurred in city A? | A1: No.

Relevant facts and circumstances: Your primary residence is located in state A. You are employed at mine sites throughout state B. During your time off you return to state A. Where a job has not been ready to start or has been interrupted, your employer pays for your return trip to city A. However you are required to pay for hotel accommodation in city A. You are not paid for the period of time you stay in city A. As the time off is unscheduled, you do not have time to return to state A.

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 a loss or an outgoing to the extent to which it is incurred in gaining or producing assessable income, except where the loss or outgoing is of a capital, private or domestic nature. In general, accommodation expenses are considered private expenses and consequently are not deductible. Court decisions and decisions of the Administrative Appeals Tribunal/Board of Review provide an independent view and confirm this. The Federal Court decision in FC of Taxation v. Toms 89 ATC 4373; (1989) 20 ATR 466, held that expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location, were not an allowable deduction as they were considered to be private expenses. Although the expenditure must be incurred in order to put one in a position to be able to derive assessable income, it does not necessarily mean that the expenditure is incurred in the course of gaining or producing that income. Likewise in your case, the accommodation expenses are incurred to enable you to stay in the proximity of your work and are a prerequisite to the earning of assessable income, they are not expenses incurred in the course of gaining or producing your assessable income. Consequently you are not entitled to a deduction for accommodation expenses incurred.