Travel deductions Shares

I received $1775 from dividends from Dominos recently

They just sent me out a brochure on there AGM being held in Brisbane next month.

My question is can i claim the airfare to there on that date to attend the AGM?
What about accomodation?

 

If your travel is solely for the purpose of attending the AGM maybe.
https://www.ato.gov.au/uploadedFiles/Content/IND/Downloads/You and your shares 2017 PDF.pdf
Do you do quality control by eating the pizzas? Maybe you could deduct that as well.

 

You can claim the travel accomodation and food.

You need to be able to demonstrate that the only reason for the travel was to attend the AGM and their was not an alternate purpose. To the extent their was an alternate purpose for the travel you need to reduce the deduction.

So if your mum was in Brisbane then it is reasonable to assume you went to visit your mum. So then none of the costs are deductible except maybe the cab fare to the AGM.

Proving your purpose is one of fact. And the smaller the income is to the costs, and the less control you can exhibit over the amount of the income generated from the shares, then the harder it is to demonstrate.

Why would you attend an AGM over an ASX listed company when your investment is nearly trivial? Your travel costs will probably be triple the dividend income and your vote will not impact on anything.

Just read the annual report.

 

ATO ID 2002/948 (Withdrawn)
Income Tax
Travel Expenses - to attend company AGM
ATO ID 2002/948 (Withdrawn) - Travel Expenses - to attend company AGM

Note this is withdrawn because the ATO deems it no longer necessary - but the principals would still apply.

BTW I wish the ATO would stop withdrawing IDs and TRs just because they have replaced them with a generic vague document has been put on a webpage - for instance this has been withdrawn because the information is in their shares booklet!

 

Taxation Ruling IT 39 allows a deduction for the 'servicing' of investment portfolios. Travel to attend a shareholder AGM is considered to be part of these expenses and is allowable under section 8-1 of the ITAA 1997.

As long as you go up there for the meeting and return home immediately and do no other private things it wouldnt require apportionment. Just need to keep evidence that it was the sole purpose for the trip.

Taxation Ruling TR 95/33 provides that where it is concluded that the disproportion between the outgoing and the relevant assessable income is essentially explained by reference to the independent pursuit of some other objective (for example for private purposes), then the outgoing must be apportioned between the pursuit of assessable income and the other objective (Fletcher v. Federal Commissioner of Taxation

 

Why would you need accommodation? Planes fly regularly and AGMs rarely go for more than a couple of hours. Half a day in Brisbane at the most.
Marg

 

I actually wouldnt have an issue with accommodation. If i flew up for an AGM (to be honest i wouldnt waste my time) the AGM may well be in the afternoon and you may want time to unwind after and consider the meeting. ATO doesnt require someone to fly back the same day. Next day would certainly be arguable.

 

Unwind?

After a shareholder meeting?

The original post said $1775 in dividends so hardly a major shareholder who may actually take part in the meeting, get to have any influence on proceedings or be required to make decisions.

Heaps of business people fly interstate for a whole day of multiple meetings then manage to fly home that evening.
Marg

 

ATO doesnt require a person to return the same day. The question regarding deductibility of overnight accommodation was considered in PBR 68204. If the sole purpose was to attend the AGM and that was the primary purpose of the trip then the overnight stay is deductible.

RBA Content

Many business people also fly business class. I have clients who fly first class. Both are deductible.

 

You're dicscussing the value/point of attending and spending the night, that's a separate discussion to what's legally allowable as a deduction.

ATO has clear tables and breakdowns for travel allowance deductions and their rates etc, not sure if the same can be used in this case but if so would be simple and self explanatory.

 

The cost of attending could even exceed the income from the shares.

 

Ultimately it does sound like a non deducitble trip being made to sound like a deductible one as it makes zero commercial sense to spend the vast majority of your earnings as a minor shareholder in a publicly listed company with readily available financials just so you can sit there and have zero influence on proceedings in person instead of sitting at home and having the same zero influencr on proceedings

 

I would consider that travel costs MAY be deductible but are they necessarily incurred ?? And have no private element. Many personal factors impact. I have seen so many issues that impact that may otherwise impact a deduction. For example where are you staying - A relative ? How long is the travel ? Car ? - Who owns it ? Who is attending - You own the shares not your family and so on.

It would need personal tax advice.

 

You may be confusing reasonable travel allowances and substantiation. There are NO tables, breakdowns and allowance deductions available for investment purposes. Add penalties etc and a expensive mistake to consider such guidance.

 

Paul i will have to come see you before the Oct 31 for the tax return

Now what is your rough estimate for advice on my financial affaurs, not for my tax return but i want to ask about negative gearing and for you to look at my financial situation and advise on things

 

I dont provide or reply to any personal issues here and ignore or refuse PMs. I often have no idea with whom I post !!! Clients have my details to interact. I guess we shall talk privately....

 

Yes we will and thankyou for being confidential in these matters and i think thats great and professional.

The reason i asked is because the accountant i went to last time told me i had to see a separate accountant from her as she does tax matters
I will come see u in the coming weeks to do my tax then we can maybe discuss a time to get your advice on what i want

Thanks Paul

 

Only business expenses need to be 'necessarily' incurred ss(1)(b),
non-business expenses just have to be 'incurred in gaining or producing' assessable income.

So for a director's meeting travel to be deductible the director must be getting income from the trip - such as directors fees or other payment from the company, not trust.

 

Sorry should have been clearer, what I was t wondering is that if the advice received was that the trip to AGM is in fact deductible, would the person going be allowed to claim expenses in line with travel allowance claims? I assume there would have to be a cap on what is reasonable to spend on accommodation and daily expenses while on that deductible trip, which is what the travel allowance table is ultimately for

 

No they cannot use the reasonable allowance basis as they dont receive a allowance. 100% substantiation is required. A taxpayer who pads a claim that doesnt seem reasonable could have the deduction denied and face the task of objection. eg Stay in a $3K a night suite and fly using a corporate jet and uses the hotels spa - Purpose may be leisure not for meeting.

A company that does not produce a dividend may be a nil deduction.