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14 (General Deductions)[1]

Carried on by the taxpayer for the purpose of gaining

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carried on by the taxpayer for the purpose of gaining  assessable income, loss or outgoing is usually  deductible ( Placer, Brown, Jones )
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Foundations of Taxation Law [¶14.4](a) © CCH Australia Limited First First     negative negative     limb – capital limb – capital Once and for all test:  expenditure   incurred “once  and for all” is usually capital in nature; expenditure  incurred “regularly” is usually revenue in nature  ( Vallambrossa Rubber ) Enduring benefit test:  expenditure incurred to bring  into existence an asset of a “lasting nature” is usually  capital in nature ( British Insulated & Helsby Cables Business entity test:  expenditure that relates to the  taxpayer’s “profit yielding structure” is usually capital  in nature; expenditure   that relates to “the process of  operating it” is usually revenue in nature ( Sun  Newspapers )
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Foundations of Taxation Law [¶14.4](b) © CCH Australia Limited Other negative limbs Other negative limbs Second limb:  Losses or outgoings of a “private or  domestic nature” Third limb:  Losses or outgoings incurred in gaining  exempt income or non-assessable non-exempt  income Fourth limb:  Losses or outgoings that are  specifically not deductible under another provision
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Foundations of Taxation Law [¶14.5] © CCH Australia Limited Clothing expenses Clothing expenses “… generally expenditure on ordinary articles of  apparel will not be deductible, notwithstanding that  such expenditure is necessary to ensure a suitable  appearance in a particular job or profession. An  employed solicitor may be required to dress in an  appropriate way by his or her employer, but that fact  alone would not bring about the result that the  expenditure was deductible.” ( Mansfield ) Cost of clothing may be deductible in special cases: Frequent changes of clothing ( Edwards ) Lager shoes ( Mansfield ) Sun protection items ( Morris
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Foundations of Taxation Law [¶14.6](a) © CCH Australia Limited Travel expenses Travel expenses Cost of travel on (ie “in the course of”) work is  generally deductible ( Taylor ) Cost of travel to find new employment is ordinarily not  deductible as it comes “too soon” to income-earning  activities ( Maddalena ) Cost of travelling between home and work ordinarily  not deductible ( Lunney & Hayley ).  Exceptions apply to taxpayers who are: Itinerant workers ( Wiener ) On stand-by duties ( Collings ) Involved in transporting bulky goods ( Vogt
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Foundations of Taxation Law [¶14.6](b) © CCH Australia Limited Travel between unrelated places of  Travel between unrelated places of  work work
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