Private ruling: work related expenses - self education
Published: November 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

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

Relevant facts and circumstances: You are currently employed as a care worker. You have completed the necessary qualifications to undertake this work. You commenced studying a course of education to become an enrolled nurse.

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. The Commissioner's view on the deductibility of self education expenses is contained in Taxation Ruling TR 98/9. These guidelines have been established through the views taken by the Courts, Boards of Review and Administrative Appeals Tribunals. In accordance with paragraphs 13 and 14 of TR 98/9, expenses of self-education will satisfy the requirements of section 8-1 of the ITAA 1997 if: · a taxpayers income earning activities are based on the exercise of a skill or some specific knowledge, and the course of self education enables the taxpayer to maintain or improve that skill or knowledge; or, · the study of a course of self education objectively leads to, or is likely to lead to, an increase in a taxpayers income from their current income earning activity in the future. Therefore, provided there is sufficient connection between your course of self education and your current income earning activities, you are entitled to claim a deduction for your self education expenses. However, as stated in paragraph 15 of TR 98/9, self education expenses will not be deductible if the study is intended to: · enable you to get employment, · enable you to obtain new employment, or · to open up a new income-earning activity (whether in business or in your current employment). In the case of Assefa v FC of T [2009] AATA 2 , ( Assefa's case ) it was considered whether studying a course of education in order to advance to a higher classification of nursing was opening up a new income earning capacity. The taxpayer in this case was employed as an assistant in nursing and a care service employee while studying a Bachelor of Nursing degree. The Administrative Appeals Tribunal held that no deduction was allowable for the self education expenses. It was determined that there was a significant difference between the position of enrolled nurse and registered nurse on one hand, and personal care assistant/nursing assistant on the other. The taxpayer was not considered to be incurring the expenditure in gaining or producing her assessable income, but was studying towards their initial qualification as a registered nurse. In your case, you are also currently employed as a care worker and are studying to become an enrolled nurse. The decision in Assefa's case can therefore be directly applied to your circumstances, as it is considered that you are studying to obtain employment in a new income earning activity as an enrolled nurse. In accordance with TR 98/9, your self-education expenses are therefore not deductible. Please note that it is not sufficient that your course of education is merely in the same general field as your current employment. The study must have a direct nexus with your specific current income earning activity.