Income tax: is an employee entitled to a deduction for depreciation in relation to an item of plant used for income producing activities when he or she is subsequently reimbursed for the cost of the item?

The Determination explains that section 51AH of the Income Tax Assessment Act 1936 (ITAA 1936) does not operate to reduce an employee's deduction for depreciation where the employee is reimbursed in respect of an amount of a tax deductible work related expense.

The Determination justified this position on the basis that a reimbursement to an employee for the cost of an item of plant was not 'in respect of a deductible loss or outgoing allowed or allowable to the employee'.

The Determination will be replaced with a new Taxation Determination which provides different reasoning. The effect of TD 93/145 will be maintained in TD 2005/D17 .