Private ruling: Self-education expenses
Date of advice: 1 August 2016
Published: September 2016
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

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

Relevant facts and circumstances: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: • the application for private ruling, • supporting documents for the private ruling request including, • copies of letter from your employer and • company publications. You are employed a specific engineer. This company you work for is a subsidiary company that manufactures aircraft for defence and commercial purposes. Flight operations form part of the company's ongoing activities. Under the regulatory regime administered by the Civil Aviation Safety Authority (CASA), beyond Visual Line of sight (BVLOS) aircraft operations in Australia have a mandatory requirement that the operators of aircraft hold a minimum qualification of a private pilot licence (PPL). You plan on undertaking a PPL course Your employer has confirmed that this is a requirement of your job.

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

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. 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 plan to undertake 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 ITAA 1997.