Private ruling: Work related expenses - self-education
Date of advice: 3 June 2024
Published: 15 July 2024
Ruling period: Year ended 20 June 20XX | Year ended 20 June 20XX | Year ended 20 June 20XX | Year ended 20 June 20XX | Year ending 20 June 20XX | Year ending 20 June 20XX
Date scheme commenced: 9 March 2020

Ruling: Q1: Are you entitled to claim course fees incurred while undertaking study for a XXXX at XXXX? | A1: Yes.

Relevant facts and circumstances: You are employed by the XXXX. You have a XXXX and a XXXX. You work at a school that caters for students with XXXX. You commenced work at the school as a XXXX in a casual position on XX XX 20XX and started ongoing employment from XX XX 20XX. You commenced study in a XXXX at XX in XX 20XX and will complete the study in XX 20XX. You incur tuition fee expenses while undertaking the study for the XXXX. You are in receipt of a FEE-HELP loan to undertake this course of study. You are not reimbursed or provided with any financial support for the study. You have provided a Role Description for XXXX (XX) from the XXXX. You have provided a statement from the school outlining the XXXX role and that the role will support the school's XXXX XXXX. The School's XXXX XXXX includes 'Strategic Direction 2: Connect and Collaborate' that cites implementation of XX XX that will support individual student needs and enhance social relationships with evaluation of the direction measured through XX XX XXX. You have provided a copy of your Performance and Development Plan that shows the school's support of your XX placements and study goals. You have provided a list of subjects that demonstrate a relationship between your employment duties and your XXXX studies.

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

Reasons for decision: Summary: Self-education expenses incurred in attending educational institutions are deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) where the expenses have the necessary connection in gaining or producing the taxpayer's assessable income. Self-education expenses are incurred in gaining or producing your assessable income where your income-earning activities are based on the exercise of a skill or some specific knowledge and the self-education enables you to maintain or improve that skill or knowledge. Subject to the general tests under section 8-1 being met, the course or tuition fees of attending an educational institution related to self-education are allowable. Course fees to attend a university or approved higher education provider are deductible only where you are enrolled in a full fee-paying place. If you use borrowed money to pay for course fees, this will not affect the deductibility of those fees or when you can claim a deduction. However, you cannot claim a deduction for repaying the principal amount borrowed. A full fee-paying student using a FEE-HELP loan, or a personal loan, can claim a deduction for their course fees (where they are deductible) at the time they pay those fees using the borrowed money. You cannot claim a deduction for repaying the loan, either as part of your income tax assessment or as voluntary repayments. Interest incurred on borrowed monies where the funds are used to pay for deductible self-education expenses, such as course fees, is deductible. It is necessary to have regard to the connection between the interest expense and the income-earning activity in each year in which the interest is claimed. Indexation of a loan, such as a HELP loan, is not interest. You cannot claim a deduction for indexation applied to your loan. | Detailed Reasoning - Application to your circumstances: In your situation we are satisfied that you have a genuine desire and need to maintain or improve your skills and knowledge as a XXXX. The course undertaken, and the placements completed are designed to improve your skills in student outcomes. The Commissioner accepts there is an identifiable nexus or connection between the course and your duties in the position of XXXX with XX XX and commencing your XX studies as demonstrated through the position description, performance development plan, school strategic plan and subject outline provided of the relationship between your employment duties and your study. The course of study is useful to your employment and is sufficiently connected with your employment. You can claim a deduction for the course fees when the expenditure is incurred, that is, in the financial year you became liable for the expenses, and the study expense is directly related to your income-earning activities. A partial deduction may be appropriate where only part of the self-education is relevant to your current income-earning activities. Where particular subjects, classes or modules within the course are sufficiently connected to your income-earning activities, you apportion by claiming a deduction only for the expenses relating to those particular subjects, classes or modules that are deductible. The list of subjects provided are sufficiently connected to your income-earning activities. If you cease your income-earning activities part-way through completing your deductible self-education, only the expenses incurred while you were undertaking your income-earning activities are deductible. Consequently, your self-education expenses for the course are sufficiently connected to your employment. The costs are therefore deductible under section 8-1 of the ITAA 1997 for the period of your enrolment in the XXXX XXXX at XXXX.