Private ruling: Deductions - self-education expenses
Date of advice: 6 March 2026
Published: 20 April 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the expenses you incurred for the courses deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No.

Relevant facts and circumstances: You took two renovation courses (the courses). You completed the courses during a particular month. You were employed in a field unrelated to renovation at the time you undertook the courses. The first course is described as a program for people who want to learn how to renovate for profit and improve renovation skills. The program includes: • Video training modules • Access to experts with renovation experience • A coaching team • A feasibility calculator • Training programs to design plans The second course is described as a program for renovators who want individualised support. The program includes: • A one-on-one coaching program • Group coaching • Members only networking group. You provided a receipt for the training showing the cost of each course. The costs of the courses were incurred on two separate dates. You did not have any prior knowledge or skills in renovation before undertaking the courses. You bought a property (the Property). You financed the purchase of the Property with a mortgage. When you purchased the Property, your intention was to renovate, add sufficient value to the existing property, and sell to make a profit. You did a renovation of the Property using skill and knowledge gained from the above two courses. The renovation began after you completed the courses. You hired a builder to complete the renovation. You sold the Property for a profit. The Property is the first property that you have purchased renovated and sold. You have now purchased and renovated one more property.

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

Reasons for decision: Summary: Self-education expenses are deductible under section 8-1 to the extent that they: • are incurred in gaining or producing your assessable income, and • are not ­ capital or of a capital nature ­ private or domestic in nature ­ incurred in gaining or producing exempt or non-assessable non-exempt income ­ prevented from being deductible by a specific provision in the tax law. Taxation Ruling TR 2024/3 Income tax: deductibility of self-education expenses incurred by an individual (TR 2024/3) sets out the principles on the deductibility of self-education expenses under section 8-1 of the ITAA 1997. Paragraphs 14 and 15 of TR 2024/3 state: '14. It is well established that the words 'in gaining or producing assessable income' are to be understood to mean 'in the course of' gaining or producing assessable income and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income. 15. This means there must be a relationship, or close connection, between the expenditure and what it is that you do to produce your assessable income, or if none is produced, would be expected to produce your assessable income.' TR 2024/3 provides in paragraph 22, two principles for when self-education expenses are incurred in gaining or producing your assessable income: • Principle 1 : Your income-earning activities are based on the exercise of a skill or some specific knowledge and the self-education enables you to maintain or improve that skill or knowledge, and/or • Principle 2 : The self-education objectively leads to, or is likely to lead to, an increase in your income from your current income-earning activities in the future. TR 2024/3 also provides in paragraph 23, two exclusions for when self-education expenses are not incurred in gaining or producing your assessable income: • Exclusion 1 : The self-education will enable you to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in your current employment). This includes studies relating to a particular profession, occupation or field of employment in which you are not yet engaged. These expenses are incurred at a point too soon to be regarded as incurred in gaining or producing your assessable income, or • Exclusion 2 : You are not undertaking income-earning activities to derive assessable income at the time you incurred the expenses. These expenses are not connected to any income-earning activity at the time they are incurred. These principles and exclusions are not mutually exclusive and should not be considered in isolation. | Detailed Reasoning - Application to your circumstances: You undertook two renovation courses and prior to taking these courses, you had no renovation knowledge or skills, and you had not renovated a property before. After you completed the courses, you purchased the Property and commenced a renovation a few months later utilising the services of a builder. You then sold the Property for a profit. This profit is assessable income. However, the renovation courses you took, were not undertaken in the course of gaining or producing that assessable income. You finished the courses before purchasing the Property and commencing your renovation activities. This means that the courses opened up a new income-earning activity for you, and therefore the expenses were incurred at a point too soon to be regarded as incurred in gaining or producing your assessable income from property renovation.