Private ruling: Work related expenses
Date of advice: 17 August 2017
Published: November 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to claim a deduction for the costs associated with the maintenance of your horses? | A1: Yes. | Q2: Are you entitled to claim a decline in value of your horses and equipment used for work related purposes? | A2: Yes. | Q3: Are you entitled to a deduction for the expenses you incur for travel between home and work? | A3: Yes.

Relevant facts and circumstances: You are employed as a clerk of the course. Your main duties are to organise, supervise and manage the horse racing at the race course. You are required to provide as part of your duties a horse, saddle and bridle and also riding gear, which you are required to transport to the race course. The work horses are used primarily for work related purposes associated with your employment at the race courses. You incur wear and tear on saddles and bridles, as well as incur expenses for feed and other related items. You have not been reimbursed for the costs that relate to your horses undertaking this work.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Division 40 | Income Tax Assessment Act 1997 Section 40-25 | Income Tax Assessment Act 1997 Subsection 40-25(7) | Income Tax Assessment Act 1997 Section 40-30 | Income Tax Assessment Act 1997 Subsection 40-80(2)

Reasons for decision: Summary: Using the principles outlined in TR 95/13 and TR 95/18, you are entitled to a deduction for the maintenance costs associated with your working horses under section 8-1 of the ITAA 1997. Section 40-25 of the ITAA 1997 allows a taxpayer to deduct an amount equal to the decline in value of a depreciating asset which is held for any time during an income year and used for a taxable purpose. A taxable purpose includes the purpose of producing assessable income (subsection 40-25(7) of the ITAA 1997). Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or because it is not an expense incurred in gaining or producing assessable income. Exceptions to this normal rule can be obtained from Taxation Ruling TR 95/34. It is accepted that equipment that is sufficiently bulky and your travel between home and work is attributed to the carriage of your work equipment, you are entitled to a deduction for the cost of this travel.