Private ruling: Self education expenses
Published: March 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for self education expenses? | A1: No.


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

Reasons for decision: Summary: There is insufficient connection between the course of study and your current income earning activities. Accordingly, the self education expenses associated with undertaking this study are not an allowable deduction. | Detailed Reasoning - Detailed reasoning: 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. The decision in FC of T v. Maddalena 71 ATC 4161; 2 ATR 541 also supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. Your work involves dealings with individuals who have suffered from neglect, abuse and trauma. However, your duties do not include providing therapy, treatment or healing. Although you may gain some knowledge and skills from the course you intend to study, that could be of some assistance in your work, the predominant focus of this course is to provide treatment, healing and the prevention of developmental, emotional, psychological or physical issues, problems and disorders. It is considered that there is an insufficient connection between the skills and knowledge required in your duties and the course that you are looking to undertake. As there is an insufficient nexus between the course of self education and your income earning activities, the self education expenses associated with the course are not incurred in earning your assessable income. Consequently you are not entitled to a deduction for the expenses under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You are employed in a role where you have to consistently engage with individuals who have suffered from neglect, abuse and trauma. | You intend to study a course that teaches a specific type of therapy. | The therapy is used for treatment, healing and the prevention of developmental, emotional, psychological or physical issues, problems and disorders. | To attend this course, you have to pay upfront fees. The fees will not be paid through HECS-HELP. | You have not approached your employer for time off at this stage due your employer's current financial restraints. | Your employment duties do not include the provision of therapy, treatment or healing.