Private ruling: work related expenses and education tax refund
Published: January 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for gym membership and personal training expenses? | A1: No | Q2: Are you entitled to a deduction for the preparation of personal photo cards? | A2: No | Q3: Are you entitled to the education tax refund? | A3: No

Relevant facts and circumstances: You work for an acting and modelling agency. You state that you are required to stay fit for this job due to the demanding work and industry conditions and requirements. You have incurred expenses for gym membership and personal training. You have incurred expenses for the preparation of personal photo cards. The photos cards are required to be sent to companies requesting actors and models from your agency. The photos cards are left with the recruitment team during the auditioning process. You are currently studying a full time course. You incurred expenses in relation to the course including course fees, textbooks and calculators. You are an Australian resident for taxation purposes. You are under 25 years of age. You do not receive any type of government allowance or benefit.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Subsection 61-610(2)

Reasons for decision: Detailed Reasoning - Work related expenses: 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 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. | Detailed Reasoning - Gym membership and personal training: Generally fitness expenses such as the cost of a gym membership are considered to be private in nature and no deduction is allowed. However, a deduction is allowable for these costs if strenuous physical activity is an essential and regular element of the taxpayer's income-earning activities, such as a Police Academy physical training instructor or a member of the Special Air Services Regiment (SAS). Their costs would be incurred to maintain a level of fitness well above the general standard. Taxation Ruling TR 95/20 sets out deductions relating to employee performing artists. It states that a deduction is not allowable for the costs of maintaining general fitness or body shape. TR 95/20 can be applied to your circumstances as an actor and a model. In your case you have advised that you are expected to stay fit due to the demanding requirements of your job and the acting and modelling industries. It is not considered that strenuous physical activity is an essential and regular element of your employment. Accordingly, the cost of your gym membership and personal training is considered to be a private expense and not allowable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Personal photo cards: TR 95/20 states that a deduction is not allowable for the costs of preparing for and attending auditions. These costs are incurred too soon to be incurred in producing assessable income. The expenses are incurred in getting work rather than doing work FC of T v. Maddalena 71 ATC 4161; 2 ATR 541. You have incurred expenses to prepare personal photo cards that your agency sends to companies requiring actors or models. These cards are left with the recruitment team at auditions. It is considered that the costs of the photo cards are associated with preparation for auditions and are incurred in gaining employment rather than in the course of employment. The costs to prepare the photo cards are incurred at a point too soon and are therefore not deductible under section 8-1 of the ITAA 1997. | Detailed Reasoning - Education Tax Refund: Subsection 61-610(2) of the ITAA 1997 states that an independent student can claim the education tax refund (ETR), in respect of their own educational expenses, where they: received a social security pension or benefit, a labour market program payment or a prescribed educational scheme payment including; Youth Allowance, ABSTUDY Living Allowance, or a disability support pension § were an independent person for the purpose for the payment § were undertaking full time secondary school studies at a secondary school or education institution such as TAFE § were under 25 years of age, and § were an Australian resident or a special category visa holder who resides in Australia. To be eligible to claim the ETR as an independent student, the student must satisfy the criteria above. Where the criteria are not satisfied, a student will not be eligible to claim the ETR. You do not receive a social security pension or benefit, a labour market program payment or a prescribed educational scheme payment. Consequently, you do not satisfy the eligibility requirements for an independent student and are not eligible to claim the ETR.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.