Private ruling: Self-education
Published: May 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for a medical and a competency renewal? | 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 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 sets out the circumstances in which self-education expenses are allowable as a deduction. Generally speaking self-education expenses are deductible where they have a relevant connection with the taxpayer's current income earning activities. If your income-earning activities are based on the exercise of a skill, or some specific knowledge, and the subject of self-education enables you to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in your income from your current income-earning activities in the future, the self-education expenses are allowable as a deduction. However, a deduction is not allowable for self-education expenses if the study is designed to enable a taxpayer to get employment, to obtain new employment, or to open up a new income-earning activity. The expenses come at a point in time too soon to be regarded as being incurred in gaining or producing assessable income. It is considered that the expense was to enable you to re-enter your profession. Therefore, you are not entitled to a deduction for the medical or the competency renewal.

Relevant facts: You were a professional and because of the lack of work contracts, your employment was terminated. | While searching for another job as a professional, you worked part-time in different fields. | After ceasing your job as a professional, you undertook a medical and a competency renewal course.