Private ruling: Travel
Published: August 2014
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for travel between your home and the airport? | 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 deals with general deductions and allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature. 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. The case of Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 7 AITR 166; (1958) 11 ATD 404 settled the principle that travel to and from work is ordinarily not deductible. The Full High Court held that costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. The travel is considered to be of an essentially private or domestic nature. In your case, your employer pays for your return economy flights to your work destination and you are upgrading those flights to business class. We accept that you are travelling in work time. However, your travel is considered to be home to work and as such no deduction is allowable for upgrading the flights.

Relevant facts: You are an Australian resident for income tax purposes. | During the 2012-13 financial year, you were employed as a training co-ordinator overseas. | Your employer pays for your economy airfares for the original trip and also for return trips on your days off period. | You have paid to upgrade the flights to business class.