24/04/2026
Home office rent and expense not deductible – ATO wins appeal
The ATO has successfully appealed to the Full Federal Court against a decision allowing a taxpayer who was required to work partly from home because of Covid restrictions deductions for a portion of his rent and car expenses:
Rent - the Court concluded that the essential character of the rent was an outgoing paid to "secure and maintain residential premises as a home".
Car expenses - the Court said the taxpayer ceased income producing activities when he stopped performing work at home and commenced different income producing activities upon starting work at the Southbank Studios. Similarly, the return journey was travelling home after income producing activities had ceased. Accordingly, the taxpayer was not performing either his digital role or his live role, or any aspect of his employment, while driving. (FCT v Hall [2026] FCAFC 43, Full Fed Ct, Thawley, McElwaine and Wheatley JJ.)
