Private ruling: Self-education expenses
Date of advice: 13 June 2016
Published: July 2016
Ruling period: Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 July 2015

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

Relevant facts and circumstances: You currently work in a management related position. You will undertake a business course. You will be on unpaid study leave while undertaking the course. You have agreed to return to your employer when you complete your studies. Your employer will recognise the your course through an increase in employment income when you return to work.

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. Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. TR 98/9 provides that if a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. Similarly, if the study of a subject of self-education objectively leads to, or is likely to lead to an increase in a taxpayer's income from his or her current income earning activities in the future, a deduction is allowable. In your case, it is considered that the study will maintain or improve your skill or knowledge used in your current income earning activity. Therefore, the expenses you incur for self-education are deductible under section 8-1 of the ITAA 1997.