Private ruling: Deduction for travel and living expenses
Published: September 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

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

Relevant facts and circumstances: You were employed to work in remote locations. You travelled from home to work in these remote locations and were based at various work sites for several months at a time. Your work roster was two weeks on and one week off. While at work your employer provided your accommodation and you purchased your own food and incidentals. In addition to your regular pay your employer paid you several allowances associated with the locations you worked in.

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) generally allows a deduction for any loss or outgoing to the extent that it is incurred in gaining or producing assessable income. It is settled law that expenses of travelling to work are not deductible as they are not incurred in gaining the assessable income, but as a pre-requisite to gaining assessable income ( Lunney v FC of T; Hayley v FC of T (1958) 100 CLR 478) ( Lunney's Case ). In considering the deductibility of travel expenses, a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel that the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194). In your case, you are travelling to work and the expenditure incurred is not an allowable deduction under section 8-1 of the ITAA 1997 . Furthermore your travel expenses are as a result of living in one place and working in another, and so are private in nature. It should be noted that the significant distance travelled is irrelevant as the law does not differentiate between, nor apply on the basis of, distances travelled. As a general rule, expenditure on meals while working away from home is not allowed as a deduction as it is not incurred in gaining or producing assessable income and is also considered to be private or domestic in nature. These costs are essentially 'living expenses' of a private or domestic nature. The fact you're your income cannot be earned unless certain expenses are necessarily incurred is not an indication of deductibility. Your travel and meal expenses are considered to be of a private or domestic nature therefore, you are not entitled to a deduction for these expenses under section 8-1 of the ITAA 1997.