Private ruling: Deduction for self education expenses
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 20011

Ruling: Q1: Are you entitled to claim a deduction for expenses? | A1: No

Relevant facts and circumstances: You are an employee. In 2011 you were elected in a role. You have worked in this role and you were paid a higher salary. In 2012 you started a course of study. This course is an essential requirement, in conjunction with other necessary academic requirements for your admission to practice as a professional.

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 circumstances in which self-education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income-earning activities are based on the exercise of a skill or some specific knowledge and the self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. However, no deduction is allowable for self education expenses if the study is to enable a taxpayer to get employment, to obtain new employment or to open up a new income earning activity (whether in business or in the taxpayer's current employment). This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income. For self-education expenses to be deductible there must be a nexus between the course of study and the duties of the taxpayer's current employment. The course is designed to provide specific qualifications in conjunction with other necessary academic requirements. Although some aspects of the course may be of some assistance to you in your work it is not considered sufficient to be able to conclude that the course has the necessary connection with your employment in this role. As the course expenses are not considered to have been incurred in the course of earning your assessable income, you are not entitled to a deduction for these expenses.

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