HWZG and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered an appeal by HWZG (the Applicant) against a decision by the Commissioner of Taxation to disallow the Applicant's objection concerning the deductibility of home office expenses. The dispute centred on the method of apportionment for these expenses.

The sole legal issue before the Tribunal was whether the Applicant's left-hand side driveway and open carport, used for private purposes, should be included in the denominator when calculating the deductible portion of home business expenses under section 8-1 of the *Income Tax Assessment Act 1997*. The Applicant sought to deduct occupancy and running expenses related to their home, which was also used as a place of business.

The Tribunal applied the principles established in *Ronpibon Tin No Liability v Federal Commissioner of Taxation*, which permits the apportionment of losses and outgoings to the extent they are incurred in gaining or producing assessable income. The court noted that expenses serving both business and private objects indifferently require a "fair and reasonable apportionment." The Tribunal was confined to the facts as described in the private ruling, which stipulated the Applicant's business use of the inside office, right-hand side driveway, and adjoining garage. The core of the dispute was whether the private use areas, specifically the left-hand side driveway and carport, should be factored into the apportionment calculation.