Costs incurred in gaining Youth Allowance held to be deductibe

  • February 18, 2010
  • Tax

Are you a full time university receiving youth allowance? You may be able to claim some related deductions against this assessable income as a result of Federal Court decision in Anstis Case.

In this case the taxpayer was a full time student studying teaching. In their tax return they had claimed $920 costs incurred in deriving the Allowance. The ATO has initally denied deductions but the full federal court has held that the expenses were deductible for the following reasons:

– The youth allowance was assessable income at general law

– The proper criteria to determine deductibility was to inquire whether the occasion of the outgoing could be found in whatever was productive of assessable income

– The expenditure was not incurred prior to the commencement of the activity which was the youth allowance income

– The income producing activity commenced with the enrolment in the university and continued throughout the period in respect of which the allowance was paid.

In this case the taxpayer was able to claim deductions for travel, supplies, depreciation of a computer and textbooks.

This article has been prepared for the purposes of general information and guidance only. It should not be used for specific advice or used for formulating decisions under any circumstances. If you would like specific advice about your own personal circumstances please contact our office.

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