14 (General Deductions)[1]

Self education expenses that relate to an occupation

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Self-education expenses that relate to  an occupation in which the taxpayer is  not currently engaged or that relate to 
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obtaining new employment are  generally not deductible ( Roberts ) § An exception may apply where self- education expenses are linked to other  kinds of assessable income (eg Youth  Allowance) ( Anstis ) Home office expenses Home office expenses § A home does not ordinarily constitute  business premises and taxpayers are  therefore not ordinarily entitled to  deductions for expenses such as rent  paid to lease their homes or interest  paid on their home loans even though  they maintain a home office ( Forsyth,  Handley ) § Expenses relating to maintenance of a  home office may, nevertheless, be  deductible where the taxpayer’s home  is also a place of business ( Swinford )
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§ TR 93/30 distinguishes between: § Occupancy expenses (eg rent,  interest, rates)  § Running expenses (eg heating,  cooling, lighting) Rent and licence fees Rent and licence fees § Deductions are generally allowed for  the payment of rent provided the only  immediate advantage secured from  making the payment is the use of an  income-producing asset over the term  of the lease ( South Australian Battery  Makers ) § Deductions are also generally allowed  for licence fees paid for the right to  exploit income-producing assets over a  period of time provided the taxpayer  does not obtain any permanent 
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ownership rights in relation to those  assets ( Citylink ) Interest expenses Interest expenses § Deductibility of interest usually depends  upon the objective use to which the  borrowed funds are applied and not the  security provided for the loan ( Munro ) § Interest is ordinarily a revenue outgoing  ( Steele ) § However, in rare cases, interest may be  capital in nature ( Macquarie Bank St  George Bank ) Legal expenses Legal expenses § Whether legal expenses are of a  revenue or capital nature is usually  determined according to the “business  entity test”
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§ Legal expenses incurred for the  purposes of protecting, preserving or  enlarging the taxpayer’s business  organisation will usually be capital in  nature ( Broken Hill Theatres John  Fairfax PBL Marketing ) Management expenses Management expenses § Management expenses incurred by  footballers were deductible under s 8-1  because: § Footballers were engaged in business  of commercially exploiting their  sporting prowess and celebrity § Playing contracts were of a revenue  nature and management fees were a  recurrent expenditure in respect of  those assets ( Spriggs & Riddell )
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