Claiming travel as a tax deduction

waz · 2 October 2009

Not long ago I was talking to a high school geography teacher who told me they claim all their overseas holidays as a tax deduction. Travel agents do the same thing. We all know its a massive rort that they and other people in certain occupations get away with. Why? Because they can. So why not the rest of us.

So Im thinking of going overseas for a while and Im wondering what I can do to claim it as a tax deduction. Does anyone know what occupations can claim this?
What are the rules around it?

I was thinking the easiest thing I could do is buy an investment property for say $5, then spend $5,000 on a trip to inspect it once a year to find a tennent

Another idea is for me to do a professional course which is related to my job function. Then claim the cost of my course and the associated travel to complete it. I could just find a cheap $500 course, then spend another $5,000 on the associated travel

Any other ideas? Im a stong believer in tax 'minimisation', its something that we should all be doing. If some people get to do it, then why not me.

Soft Dough · 2 October 2009

waz said:
Not long ago I was talking to a high school geography teacher who told me they claim all their overseas holidays as a tax deduction. Travel agents do the same thing. We all know its a massive rort that they and other people in certain occupations get away with. Why? Because they can. So why not the rest of us.

So Im thinking of going overseas for a while and Im wondering what I can do to claim it as a tax deduction. Does anyone know what occupations can claim this?
What are the rules around it?

I was thinking the easiest thing I could do is buy an investment property for say $5, then spend $5,000 on a trip to inspect it once a year to find a tennent

Another idea is for me to do a professional course which is related to my job function. Then claim the cost of my course and the associated travel to complete it. I could just find a cheap $500 course, then spend another $5,000 on the associated travel

Any other ideas? Im a stong believer in tax 'minimisation', its something that we should all be doing. If some people get to do it, then why not me.

While people are at it, are spouses accompanying me on my "conference" tax deductable too?

I mean the prime minister's wife gets paid to go with the prime minister by the taxpayer, why should the masses be treated differently?

PS LOVE the investment property one!

prawn_86 · 2 October 2009

Travel agents cannot claim their holidays as a tax deduction, My partner is a travel agent and we looked into this, there is even a specific section on the ATO sight.

If their entire trip has been sponsored as such or is for a specific work related product then they can claim it, but they cant claim their personal holidays. If they travel somewhere for a day conference, they can claim the costs of that day, but none others if they stay longer. So your example of $5k worth of travel for a course would not work unless it was just for the duration of that course, and you were travelling 1st class, 5 star hotels etc (of course you can go and do things after the classes at night).

Of course you can simply say it was for work purposes, but then that is tax evasion etc, which is an issue for a different thread.

springhill · 2 October 2009

waz said:
Not long ago I was talking to a high school geography teacher who told me they claim all their overseas holidays as a tax deduction. Travel agents do the same thing. We all know its a massive rort that they and other people in certain occupations get away with. Why? Because they can. So why not the rest of us.

So Im thinking of going overseas for a while and Im wondering what I can do to claim it as a tax deduction. Does anyone know what occupations can claim this?
What are the rules around it?

I was thinking the easiest thing I could do is buy an investment property for say $5, then spend $5,000 on a trip to inspect it once a year to find a tennent

Another idea is for me to do a professional course which is related to my job function. Then claim the cost of my course and the associated travel to complete it. I could just find a cheap $500 course, then spend another $5,000 on the associated travel

Any other ideas? Im a stong believer in tax 'minimisation', its something that we should all be doing. If some people get to do it, then why not me.

My understanding is you can claim a % of the 'property investment' holiday, but you can only legally claim the percentage of time you spent looking for a tenant/inspecting the property.
Example $5000 holiday, you spend 10% of the time on the property, you can claim $500.

waz · 2 October 2009

Thanks prawn_86, while we know that they 'should not'. We all know that many people are and getting away with it.

The school teachers I have spoken to who go on 'personal holidays' for their 6 week summer break are claiming it as a work related expense and have being getting away with it.

Plus we all know that most property investors who have interstate property are spending 95% of their property inspection time on personal activities. How convenient to organise your property inspection trip the same weekend that your freind interstate is getting married. 'Oh I was just int he neighbourhood and thought id pop in'.

Yup, I think your right springhill, although I doubt people would put down 10%. I will just tell the ATO that I like to count the bricks to make sure that all 76,485 are still there. That took up a good 95% of my time on my holiday.

prawn_86 · 2 October 2009

waz said:
Thanks prawn_86, while we know that they 'should not'. We all know that many people are and getting away with it.

The school teachers I have spoken to who go on 'personal holidays' for their 6 week summer break are claiming it as a work related expense and have being getting away with it.

Plus we all know that most property investors who have interstate property are spending 95% of their property inspection time on personal activities. How convenient to organise your property inspection trip the same weekend that your freind interstate is getting married. 'Oh I was just int he neighbourhood and thought id pop in'.

I would suggest that all these things constitute tax evasion rather than minimisation, and if the ATO were to investigate they would have a very strong case to prosecute.

As springhill said you can claim the % time. Anything more than that is illegal and is definitely not condoned by ASF.

skc · 2 October 2009

waz said:
So Im thinking of going overseas for a while and Im wondering what I can do to claim it as a tax deduction. Does anyone know what occupations can claim this?
What are the rules around it?

I was thinking the easiest thing I could do is buy an investment property for say $5, then spend $5,000 on a trip to inspect it once a year to find a tennent

Any other ideas? Im a stong believer in tax 'minimisation', its something that we should all be doing. If some people get to do it, then why not me.

Where do you find investment property for $5?

One idea I know someone has is to invest in a small hotel / resort, and claim holiday accommodation expense as study tours.

Unsure about legality, how much you need to invest or how much you can claim etc.

For example, investing $100 in a listed pub group and start claiming every trip to the pub as a tax deduction would likely not be viewed positively.

matty2.0 · 2 October 2009

tax office is not dumb.

i did this a few years back for an investment conference and eventually ended up paying it back in tax when the ATO inspected my deductions.

springhill · 2 October 2009

waz said:
Yup, I think your right springhill, although I doubt people would put down 10%. I will just tell the ATO that I like to count the bricks to make sure that all 76,485 are still there. That took up a good 95% of my time on my holiday.

LMAO i'm into some weird **** but thats one kinky fetish you got there.... hmmmm now there's an idea for a new thread......

stocksontheblock · 2 October 2009

waz said:
Not long ago I was talking to a high school geography teacher who told me they claim all their overseas holidays as a tax deduction. Travel agents do the same thing. We all know its a massive rort that they and other people in certain occupations get away with. Why? Because they can. So why not the rest of us.

You do know this is a wonderful urban myth, don’t you? In certain circumstances 'parts' of a holiday for an academic are tax deductible, yet not the 'whole' family holiday for a high school teacher. I think the teacher you were talking to was possibly pulling your leg.

So Im thinking of going overseas for a while and Im wondering what I can do to claim it as a tax deduction. Does anyone know what occupations can claim this?

I know plenty of occupations that you can do this with, however, what occupation do you have? Or are you looking to make one up? In which case you can’t do it, as any 'travel' must be associated with what you do.

So, you can’t attend an IT conference in - say Las Vegas, while you are an accountant. They are not related. It should also be understood that any expenses you wish to claim must be for the duration only of the 'course' etc you are attending. So, if the course/conference was for 3 days then you can claim the airfare there and back and the hotel for the 3 days, yet if you were there 2 weeks the rest would not be a deduction. And it will only apply to you – not your family etc.

What are the rules around it?

Depends on what you are looking to do. However, generally, the rules are tight(ish) as the ATO is awake to this sort of – let’s call it, fraudulent activity.

I was thinking the easiest thing I could do is buy an investment property for say $5, then spend $5,000 on a trip to inspect it once a year to find a tennent

Once again, the expenses have to be reasonable, and can only be claimed for the time actually spent doing the job. So, if you use an agent to manage the property and they are finding new tenants you cannot claim a 2 week holiday to oversee it - sorry, yet that’s out of scope as you are paying an agent which is an expense, and hence deductable.

You can claim a night, possible 2 to inspect or talk to the agent etc. Yet you would have no hope of claiming more. People may, and I am sure some will tell you can, yet if you get audited you will be done.

P.S. If you find this $5 property let me know, I’ll take 20.

Another idea is for me to do a professional course which is related to my job function. Then claim the cost of my course and the associated travel to complete it. I could just find a cheap $500 course, then spend another $5,000 on the associated travel

The course must be recognised!

However, remember, you have to spend this money to get it back, and if your income is not high enough to make such high deductions then you are no better off.

gooner · 2 October 2009

prawn_86 said:
Travel agents cannot claim their holidays as a tax deduction, My partner is a travel agent and we looked into this, there is even a specific section on the ATO sight.

If their entire trip has been sponsored as such or is for a specific work related product then they can claim it, but they cant claim their personal holidays. If they travel somewhere for a day conference, they can claim the costs of that day, but none others if they stay longer. So your example of $5k worth of travel for a course would not work unless it was just for the duration of that course, and you were travelling 1st class, 5 star hotels etc (of course you can go and do things after the classes at night).

Of course you can simply say it was for work purposes, but then that is tax evasion etc, which is an issue for a different thread.

prawn_86

I'm an accountant so can only claim very little - a bit of internet use, a bit of mobile use, my MBA when I did it, however usually lucky if I can claim more than a thousand dollars or so.

My wife was a travel consultant. She never claimed for holidays, but she did claim for overseas trips to inspect places to sell to customers and I accompanied her. My costs were out of my own pocket and not tax-deductible, but my wife's were fine. We even provided details to ATO once or twice when they requested. I think the line is a grey one for a few occupations such as travel consultants.

There was a case where an architect successfully claimed for travel costs for a 4-week European tour (i.e a holiday) looking at all the buildings.

waz · 2 October 2009

I was being sarcastic when I said buy a house for $5.

However here is a nice house which can be bought for less than $10,000
http://www.realtor.com/realestatean...ory-St_Lansing_MI_48912_1111419198?source=web

Its in Detroit, so I guess I will need about 6 months to find myself a tenant in this ghost town. (Again, I being sarcastic here to prove the point, Im not going to actually do it).

So it looks like we have 2 types of people here.
1. Those that think its impossible and an urban myth.
2. Those that think it is possible as long as you are reasonable and dont appear to be rorting the tax system by only claiming the correct portions of your travel.

'Reasonable' is in the eye of the beholder.

Stocksontheblock, my buddy took a week holiday to Hawaii with 4 of her best friends, plenty of alcohol was drunk and dancing was done. All part of academic research of course.

PS. I work in IT as a contractor, so I guess I can goto Las Vegas for that IT convention.

gooner · 2 October 2009

waz said:
I was being sarcastic when I said buy a house for $5.

However here is a nice house which can be bought for less than $10,000
http://www.realtor.com/realestatean...ory-St_Lansing_MI_48912_1111419198?source=web

Its in Detroit, so I guess I will need about 6 months to find myself a tenant in this ghost town. (Again, I being sarcastic here to prove the point, Im not going to actually do it).

So it looks like we have 2 types of people here.
1. Those that think its impossible and an urban myth.
2. Those that think it is possible as long as you are reasonable and dont appear to be rorting the tax system by only claiming the correct portions of your travel.

'Reasonable' is in the eye of the beholder.

Stocksontheblock, my buddy took a week holiday to Hawaii with 4 of her best friends, plenty of alcohol was drunk and dancing was done. All part of academic research of course.

PS. I work in IT as a contractor, so I guess I can goto Las Vegas for that IT convention.

Various professions advertise trips to Aspen, Niseko etc for conferences. There are lectures at 8 am with breakfast and 5pm with tea, but nothing during the day. Funny that.

All tax deductible, as I understand.

Julia · 2 October 2009

This thread reminds of one year when I claimed the cost of my dog on my tax return, including purchase price of the dog, all veterinary expenses and food etc for the year.

They accepted this on the basis that I was carrying in the course of my work Schedule One drugs and needed the dog to protect me and the drugs.

gooner · 2 October 2009

Julia said:
This thread reminds of one year when I claimed the cost of my dog on my tax return, including purchase price of the dog, all veterinary expenses and food etc for the year.

They accepted this on the basis that I was carrying in the course of my work Schedule One drugs and needed the dog to protect me and the drugs.

Hmmm

I have two Siberian Huskies. Not much snow in Sydney, but if I lived in Thredbo, perhaps I could claim as part of my travel expenses

Julia · 2 October 2009

I tried it again the next year, but apparently the clerk who processed the return didn't have the same sensibilities about dogs and it was rejected.

Huskies are gorgeous. How easy are they to train? Any pics?
(Apologies for being off topic.)

matty2.0 · 2 October 2009

gooner said:
Hmmm

I have two Siberian Huskies. Not much snow in Sydney, but if I lived in Thredbo, perhaps I could claim as part of my travel expenses

Fabregas is going to Barca ... according to rumors.

gooner · 3 October 2009

Very short replies to off-topicalities

Julia said:
I tried it again the next year, but apparently the clerk who processed the return didn't have the same sensibilities about dogs and it was rejected.

Huskies are gorgeous. How easy are they to train? Any pics?
(Apologies for being off topic.)

Huskies in general are very hard to train. Eldest one was a nightmare, although youngest one showed promise. Unfortunately, as the younger one got older, he learned stubborness from the eldest one

Tried to post photo but too big for ASF

matty2.0 said:
Fabregas is going to Barca ... according to rumors.

That rumour is always around. Contract is to 2014 so at least we are guaranteed a good price if he does go.

Garpal Gumnut · 3 October 2009

I was able to claim my recent trip to Kazakhstan, the clubs, the soccer and all the grog.

So leave off the ATO.

They are a good bunch of people.

They have a very difficult job to do getting money off wage earners and are exposed to constant abuse.

I think they do excellent work.

I won't quote Kerry Packer on taxes and guvment.

Sorry I cant help meself, I will.

"Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!"

gg

Krusty the Klown · 3 October 2009

waz said:
it is possible as long as you are reasonable and dont appear to be rorting the tax system by only claiming the correct portions of your travel.

The crucial word here is "reasonable". The tax department must use this word when applying tax law the same way the word is used throughout the rest of our legal system.

So if you are husband and wife taxpayers earning $100,000 p.a. combined and spend $5,000 inspecting a rental property over 2 weeks, this would be deemed "unreasonable" as it is quite clear that you don't spend $130K p.a. on living expense. Reasonably you could claim 2 return airfares, one night's accomodation and any meals over the same time frame. Alcohol is not allowed as a deduction for any reason, as is any other entertainment expense.

'Reasonable' is in the eye of the beholder.

Not when it comes to law, including tax law, "reasonable" is in the eyes of our legal system.

Just because geography teachers say they successfully claim $5K holidays as an expense for the whole family just means they haven't been caught yet, it doesn't make it a legal precedent.

Sorry to burst your bubble guys.......

P.S. I would be curious GG, as to how you were able to claim grog as a deduction.

Claiming travel as a tax deduction

waz

Soft Dough

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springhill

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waz

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Claiming travel as a tax deduction

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