Private ruling: Work related expenses
Published: November 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for the expenses incurred in working as a volunteer overseas? | A1: No.

Relevant facts and circumstances: You worked as a volunteer overseas for a charity. You incurred expenses for airfares, registration and program fees.

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 all losses and outgoings to the extent to which they are incurred by an individual in gaining or producing assessable income except where the outgoings are of a capital, private, or domestic natures, or relate to the earning of exempt income. A number of significant court decisions have determined that, for an expense to satisfy the tests in section 8-1 of the ITAA 1997: · it must have the essential character of an outgoing incurred in gaining assessable income, or in other words, of an income producing expense · there must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income, and · it is necessary to determine the connection between the particular outgoing and the operations or activities by which you most directly gain or produce his your assessable income. In your case you voluntarily gave your time and services to a charity. You incurred expenses in relation to your voluntary work. Accordingly, the expenditure was not incurred in the course of gaining or producing your assessable income. You are therefore not entitled to a deduction under section 8-1 of the ITAA 1997 for the costs incurred by you.