Private ruling: Self-education expenses
Date of advice: 11 December 2025
Published: 27 January 2026
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Am I entitled to claim deductions for the expenses incurred for specific units of the degree I am enrolled in under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No

Relevant facts and circumstances: You were employed by Company A for the period DDMMYYY to DDMMYYY part-time. You were employed by Company B for the period DDMMYYYY to DDMMYYYY. You commenced employment with Company C on DDMMYYYY.

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

Reasons for decision: Summary: Section 8-1 of the 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 2020/1 Income tax: employees: deductions for work expenses under section 8-1 of the Income Tax Assessment Act 1997 sets out when an employee can deduct a work expense under section 8-1 of the ITAA 1997. The pivotal element of section 8-1 for work expenses is the requirement that expenses be incurred 'in gaining or producing assessable income'. Paragraph 22 of TR 2020/1 provides: '...the requirement that expenses be incurred in the course of producing assessable income means that it is not enough to show only that there is some general link or causal connection between expenditure and the production of income. The expenditure must have a sufficiently close connection to performance of the employment duties and activities through which the employee earns income.' The High Court majority in Commissioner of Taxation v Payne [2001] HCA 3 said it is well established that these words are to be understood as meaning incurred 'in the course of' gaining or producing assessable income, and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income. The majority further stated that the meaning of 'in the course of' gaining or producing income was amplified in Ronpibon Tin NL v Commissioner of Taxation (Cth) [1949] HCA 15 where it was held that: '... to come within the initial part of [section 8-1] it is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of the assessable income, or if none be produced, would be expected to produce assessable income...' Taxation Ruling TR 2024/3 Income tax: deductibility of self-education expenses incurred by an individual discusses the circumstances under which self-education expenses are allowable as a deduction. TR 2024/3 provides that self-education expenses are deductible where a taxpayer's income-earning activities are based upon the exercise of a skill or specific knowledge, and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge. Self-education expenses are also allowable as a deduction where the study of the subject objectively leads to, or is likely to lead to, an increase in the taxpayers' income from their current income-earning activities in the future. Self-education expenses are not incurred in gaining or producing your assessable income if the following applies: The self-education will enable you to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in your current employment). This includes studies relating to a particular profession, occupation or field of employment in which you are not yet engaged. These expenses are incurred at a point to soon to be regarded as incurred in gaining or producing your assessable income. Several court cases have established the principles followed in determining the deductibility of self-education expenses. | Detailed Reasoning - Incidental and relevant: If a course of study is too general in terms of your current income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist. In Case Z1 22 ATR 3549; 92 ATC 101 ( Z1 ), a public service clerk studying for a law degree later obtained a legal officer position in the public service. The qualifications as a solicitor were not necessary for her current employment. The expenses were held to have been incurred in getting work as a legal officer not in doing work as an employee and therefore not deductible. At all times the taxpayer was employed in a position where such qualifications were not necessary although the gaining of such qualifications were encouraged. The course was pursued by the taxpayer of her own choice and for her own self-improvement. Taxation Ruling TR 2024/3 provides the Commissioner's view for the circumstances under which self-education expenses are claimable as a deduction. TR 2024/3 provides that a deduction is allowable for self-education 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). 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. We also reference, paragraph 28 of TR 2024/3 which explains that if a course of study is too general in terms of the taxpayer's income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist, meaning that no deduction for self-education expenses would be allowable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Application to your circumstances: To determine whether circumstances exist that support your self-education deductions, it is necessary to determine whether there is a sufficient connection between you incurring your university fees and your current income earning activities in the positions held. Whether such a connection exists is a question of fact and is to be determined by reference to all the facts in your case. The level of knowledge imparted by the specific subjects detailed are considered beyond that required for the roles you held at the time and is more in line with opening up new income earning activities. As such the expenses incurred for the specific subjects are not allowable as a self-education expense. Your situation is similar to the examples given in case Z1 above. While legal qualifications may assist you in your current employment duties to some extent, a legal qualification is not a necessary explicit or implicit requirement of your employment. The graduate entry law degree designed for non-law graduates. The course focuses on the knowledge, legal skills and professional ethics expected of legal practitioners and satisfies the academic requirements for admission to practice as an Australian Lawyer. We consider that you are not entitled to a deduction for your self-education expenses incurred in undertaking the degree, as due to the nature of the study, it will open up a new field of employment. The factual reality is that completion of the degree equips you with much greater skills than that required for the employment activities deriving your assessable income. While some of the subjects provide knowledge and skills that are used in your role held during the income year, these roles do not require qualifications in the subject chosen. Your studies will provide you with qualifications that are far in excess of the requirements of your positions held during the period of the ruling and cannot be said to be sufficiently related to your current employment duties. The connection to your current employment duties is tenuous at best and would be considered as "a point to soon". We have assessed the units completed thus far as part of the outcome of the course would open up new income-earning activities, as it is designed to enable you to obtain new skills and acknowledge that are not detailed in your duty statement and provide you with a qualification that would allow you to move into a new area of employment. On completion of the course you will become a qualified legal practitioner which is not within your current employment duties.