Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 1/37)
Character Range: 396177–398765

4                             Subdivision 12‑D  Benefit, training and compensation payments

26‑31  Travel related to use of residential premises as residential accommodation
 (1) You cannot deduct under this Act a loss or outgoing you incur, insofar as it is related to travel, if:
 (a) it is incurred in gaining or producing your assessable income from the use of *residential premises as residential accommodation; and
 (b) it is not necessarily incurred in carrying on a *business for the purpose of gaining or producing your assessable income.

Exception—kind of entity
 (2) Subsection (1) does not stop you deducting a loss or outgoing if, at any time during the income year in which the loss or outgoing is incurred, you are:
 (a) a *corporate tax entity; or
 (b) a *superannuation plan that is not a *self managed superannuation fund; or
 (c) a *managed investment trust; or
 (d) a public unit trust (within the meaning of section 102P of the Income Tax Assessment Act 1936); or
 (e) a unit trust or partnership, if each *member of the trust or partnership is covered by a paragraph of this subsection at that time during the income year.

26‑35  Reducing deductions for amounts paid to related entities

You can only deduct reasonable amounts paid to related entities
 (1) If, under another provision of this Act, you can deduct an amount for a payment you make, or for a liability you incur, to a *related entity, then you can only deduct so much of the amount as the Commissioner considers reasonable.
Note: This section has a special operation if the payment is made, or the liability is incurred, by a partnership in which a private company is a partner: see section 65 (Payments to associated persons and relatives) of the Income Tax Assessment Act 1936.

Meaning of related entity
 (2) A related entity is any of the following:
 (a) your *relative; or
 (b) a partnership in which your relative is a partner.
 (3) In the case of a partnership, a related entity is any of the following:
 (a) a *relative of a partner in the partnership;
 (b) an individual who is or has been a director of a company that is a partner in the partnership and is a *private company for the income year;
 (c) an entity that is or has been a shareholder in a company of that kind;
 (d) a *relative of an individual who is or has been a director or shareholder of a company of that kind;
 (e) a beneficiary of a trust if the trustee is a partner in the partnership;
 (f) a *relative of a beneficiary of a trust if the trustee is a partner in the partnership;
 (g) another partnership, if a partner