Private ruling: Self-education expenses
Date of advice: 14 March 2016
Published: May 2016
Ruling period: Year ended 30 June 20X
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for expenses incurred for your endorsement training and rating testing? | A1: Yes.

Relevant facts and circumstances: You were employed in a position. You were offered employment with another company. When you were offered the new position you were required to obtain additional endorsements to your licence. You obtained the endorsements using your new employer's aircraft.

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) states that you can deduct from your assessable income any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income, except where the loss or outgoing is 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. A deduction is allowable for self-education expenses 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 (paragraph 13). 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 their current income earning activities in the future, a deduction is allowable (paragraph 14). However, no deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment or to obtain new employment. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (paragraph 15). In your case, you were employed in a position. You were offered a position with another company provided you obtained the additional endorsements to your licence. You accepted the position prior to paying for and undertaking the endorsement training. You commenced your duties after completion of the training. These factors give weight to the conclusion that you were already employed at the time you undertook the endorsement training. As you are considered to have been employed with your new employer at the time you undertook the training, the expenditure is not considered to be incurred at a point too soon. The expenditure is regarded as having been incurred in gaining or producing assessable income and as such is an allowable deduction under section 8-1 of the ITAA 1997.