Legislation And Commentary

Running head: TAXATION LAW
Taxation Law
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TAXATION LAW1
Table of Contents
Introduction:...............................................................................................................................2
Discussion about the ruling:.......................................................................................................2
Date of effect:.............................................................................................................................3
Explanation of Ruling:...............................................................................................................3
Deduction for “Decline in Value” of depreciating asset:..........................................................4
Repairs to home office:..............................................................................................................4
Capital gains implications:.........................................................................................................5
Conclusion:................................................................................................................................5
References:.................................................................................................................................6

TAXATION LAW2
Introduction:
The “taxation ruling of TR 93/30” is concerned regarding the deduction that is
allowable for home office outgoings. In detail, the “taxation ruling of TR 93/30” provides
explanation when an area in the house is viewed as private study. It explains when the area of
the house is viewed as the place of business (Woellner et al. 2016). The ruling is concerned
with providing explanation when the when a taxpayer is permitted to get deduction in each of
the case within the “sec 8-1 ITAA 1997” and the manner in which it should be computed. The
ruling further provides clarification regarding the deduction of repairs under the “sec 25-10
of the ITAA 1997”. The ruling is also dealing with the consequences of CGT following the
sale of main residence relating to which home office expenditure has taken place.
Discussion about the ruling:
The general rule explains that outgoings associated to home of a taxpayer is viewed as
private or domestic in type and no tax deduction is allowed. An exception is that a deduction
is permitted when the portion of home is utilized for generating income and holds the nature
of “place of business”. In such a situation, certain outgoings occurred for home such as
interest, rent, repairs, house and content insurance, rates and taxes on property is partially
permitted for deduction (Sadiq 2019). There are certain factors which might indicate whether
or not the area is set aside carries the character of place of business.
a. The area can be recognized has “place of business”
b. The area cannot be considered readily suitable or adaptable for private usage or
domestic usage purpose in relation to home.
c. The area is mainly set aside for conducting business activities
d. The area is mainly used visiting purpose of clients