Private ruling: Self education expenses
Published: October 2012
Ruling period: Year ended 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: 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. 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. The training course you undertook of your own accord was undertaken to begin a new career. When you completed this course you acquired new and different skills rather than maintaining or improving your existing income earning skills or knowledge. You undertook study to enable you to open up a new income earning activity. You were not earning assessable income from your new activity at the time you undertook the course. The incurring of the expenses occurred at a point too soon to be deductible. You are therefore not entitled to a deduction for the expenses incurred.

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 were employed in a particular profession. | You received a verbal offer of employment in a different field from another employer 2011. | You tendered your resignation at your previous employer on 2011, effective X 2011. | You enrolled in a training course of your own accord, in X and Y 2011. | Your employment commenced with your new employer in 2012.