Private ruling: Work-related travel expenses
Date of advice: 6 October 2016
Published: December 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for travel expenses you incurred in respect of your child and their carer? | A1: No

Relevant facts and circumstances: You attended a conference. You incurred expenses for your child and their carer to accompany you. You wish to claim a deduction for the cost of travel for your child and their carer.

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) broadly allows a deduction for any losses or outgoings to the extent to which they are incurred in gaining or producing assessable income except to the extent outgoings are of a capital, private or domestic nature. What constitutes private or domestic expenses is not defined in the Act, however under ordinary concepts, expenditure that is private in nature is generally considered to relate to the taxpayer in his or her personal or private capacity and expenditure that is domestic in nature is ordinarily associated with the taxpayer's household or other domestic affairs. Expenditure which is essentially of a private or domestic nature will not generally be deductible as it will not have been incurred by a taxpayer in the course of gaining or producing assessable income, even though the taxpayer may, as a matter of practicality, need to incur the expenditure to earn assessable income. For example, in Lodge v Federal Commissioner of Taxation (1972) 128 CLR 171, Martin v Federal Commissioner of Taxation (1984) 2 FCR 260 and Jayatilake v Federal Commissioner of Taxation (1991) 91 ATC 4516, child minding expenses incurred to enable the respective taxpayers to engage in work were held not to be deductible on the basis that they were "private" in nature. In Waters v Commissioner of Taxation [2010] AATA 846, the expenses incurred by a taxpayer to enable his son to travel from Australia to Panama to visit him and his wife was not deductible under section 8-1 of the ITAA 1997 as they did not represent expenses incurred by Mr Waters in the course of gaining or producing assessable income in Panama. There was no nexus between the expenditure on airfares and the production of assessable income by the taxpayer and the expenditure of a private or domestic nature as it related to his personal family affairs. In your case, you are not entitled to a deduction for the cost of travel for your child and their carer. Even though the incurring of the expense enabled you to earn assessable income, in the sense that you could attend a conference as part of your work duties, the expense is not incurred or directly related to how you carry out your duties. The expenses remain domestic and private in nature and therefore not deductible.