Private ruling: Self-education
Date of advice: 7 July 2016
Published: August 2016
Ruling period: Year ended 30 June 2016 | Year ending 30June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: The scheme has commenced

Ruling: Q1: Are you entitled to claim a deduction for self-education expenses? | A1: Yes

Relevant facts and circumstances: You are employed in a particular profession. You have enrolled in an MBA course which was due to start in 20XX. Your current duties include; • Stakeholder engagement • Contract management and procurement • Contractor mobilisation • Budgeting/scheduling • Reporting to management The core units of your course are; • Introduction to management • Business economics • Leadership in a complex environment • Quantitative methods for business decision making • Accounting: A user perspective • Fundamentals of people management The course may take a number of years to complete.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge, and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). Further, paragraph 26 of TR 98/9 states that expenses relating to self-education which are compulsory and unavoidable, as well as those for which a need can be shown in terms of fulfilling the requirements of the course, are regarded as being 'necessarily incurred' and are expenses of self-education. In your case, it is accepted that the course you have undertaken will enhance the skills and knowledge that are required in the performance of your current employment duties. Consequently, the self-education expenses incurred in undertaking this course have the necessary and relevant connection with the earning of your assessable income and are deductible under section 8-1 of the Income Tax Assessment Act 1997 .