Private ruling: Travel and accommodation expenses
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 airfare and accommodation expenses? | 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. Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless one arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166). Taxation Ruling IT 2481 provides that where you voluntarily transfer employment and incur expenditure in moving or relocating from one place of residence to another, that expenditure is not deductible. In these circumstances you are not travelling for your work, rather you are travelling to your work. You are therefore not entitled to a deduction relating to your travel from overseas to Australia. These expenses are incurred to enable you to move from one place to another to commence work at a different location. The expenses are therefore private in nature and not deductible. You have incurred expenses for accommodation while undertaking training. The cost of accommodation is not tax deductible as it is essentially a living expense and private in nature.

Relevant facts: You have travelled from overseas to Australia to start a new job. | You have incurred accommodation expenses while undertaking training for this new job.