Private ruling: Agistment
Published: November 2014
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for agistment? | A1: No.


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 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. In Ronbipon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47; [1949] ALR 875; (1949) 23 ALJ 139, the High Court of Australia stated that in order for expenses to be allowable as deductions, the expenses must be incidental and relevant to the gaining of the assessable income. Whether this connection exists is a question of fact to be determined by reference to all the facts of the particular case. In your case, while we accept that your job entails riding animals, the expenses you incur for agistment are not incurred in producing your assessable income. Rather, the expense is incurred for you to be able to use a particular animal to train and use to build up your experience and personal reputation. It is considered that the expenses lack sufficient nexus to your income producing activity as a rider and trainer and are considered to be private in nature. Consequently, you are not entitled to a deduction for agistment fees.

Your duties involve riding and training your employer's animals. | You compete in events on animals owned by your employer. | Your employer pays all entry fees and also retains any prize-money or prizes you win. | You pay a weekly agistment fee to your employer to so that you can train a particular animal to use in these competitions to build up your experience and personal reputation.