Private ruling: Storing furniture
Published: June 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 the costs of storing your furniture? | 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 broadly allows a deduction for any losses or outgoings to the extent to which they are incurred in gaining or producing assessable income except to the extent outgoings are of a capital, private or domestic nature. The courts have considered the meaning of 'incurred in gaining or producing the assessable income'. In Ronpibon Tin NL Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; 56 ALR 785; 8 ATD 431 the High Court stated that 'For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing the assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing assessable income" mean in the course of gaining or producing such income.' The expenditure must therefore be related to the production of assessable income. While we accept that you could not leave your furniture in your home when you rented it, the furniture remains private possessions unconnected with the renting of the property. Accordingly, the expense of storing the furniture is not deductible because it was not incurred in gaining or producing assessable income and is also private in nature.

Relevant facts: You moved out of your residential home to live and care for relatives. | You rented out your home. | It was not possible to take your furniture to your relative's home. | You have incurred costs for storing the furniture.