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Schedule 1—Travel related to use of residential premises

Schedule 1 Travel related to use of residential premises

   

Income Tax Assessment Act 1997

1  Section 12-5 (table item headed “travel expenses”)

Omit:

see also substantiation

 

substitute:

travel related to the use of residential premises as residential accommodation .........................................



26-31

see also substantiation

 

2  After section 26-30

Insert:

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.

3  After subsection 110-38(4)

Insert:

          (4A)  Expenditure does not form part of any element of the cost base to the extent that section 26-31 prevents it being deducted.

Note:          Section 26-31 denies deductions for travel related to the use of residential premises as residential accommodation.

4  After subsection 110-55(9H)

Insert:

           (9J)  Expenditure does not form part of the reduced cost base to the extent that section 26-31 prevents it being deducted.

Note:          Section 26-31 denies deductions for travel related to the use of residential premises as residential accommodation.

5  Application

The amendments made by this Schedule apply to a loss or outgoing incurred on or after 1 July 2017.