Private ruling: work related expenses - relocation, electronic items
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for relocation expenses incurred to obtain new employment? | A1: No | Q2: Are you entitled to a deduction for the cost of electronic goods purchased for use in your new main residence? | A2: No

Relevant facts and circumstances: You relocated interstate in order to access greater work opportunities. You incurred relocation costs. You also purchased new electronic items to replace those which were left behind in your previous main residence for the use of your new tenants.

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 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. Taxation Ruling IT 2614 examines the deductibility of relocation expenses. The ruling states that expenses incurred in relocating to take up an appointment with a new or existing employer are not allowable deductions as they are private or domestic in nature. This is so, regardless of whether an allowance has been paid, or if the relocation was involuntary. Taxation Ruling IT 2481 also discusses this expense. At paragraph 9 the ruling states the expenditure is not incurred in gaining or producing income and is not deductible as the taxpayer is not travelling in the course of work, but to work. In your case, you incurred costs to relocate from one state to another. Even though you relocated in order to obtain new employment, the expenses remain private or domestic in nature as you travelled to obtain work, not in the course of your work. They are not expenses incurred in gaining or producing your income. You are therefore, not entitled to a deduction for the costs of relocating. The electronic goods you purchased are for your personal use in your new main residence, and are not being used to produce assessable income. In accordance with section 8-1 of the ITAA 1997, they are therefore considered a private expense, and you are not entitled to a deduction for the cost of purchasing new electronic items.