Private ruling: Self-Education Expenses
Date of advice: 5 May 2016
Published: June 2016
Ruling period: Year ending 30 June 2015 | This scheme commenced on: | 1 July 2014

Ruling: Question and answer: | Are the costs of your educational courses deductible self-education expenses? | Yes

Relevant facts and circumstances: You were employed during the relevant income year. You are required by your professional association to undertake professional development. You were encouraged and supported by your employer to undertake these courses of study so you could improve your abilities. There was also an expectation that this study would lead to an increase in income through an increase in clientele. You undertook a range of educational courses in the relevant year. No part of you expenses has been reimbursed by your employer. You provided services based on the knowledge that you gained through undertaking these courses.

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

Reasons for decision: Summary: Your self-education expenses are deductible as the study maintains or improves the knowledge and skills that are required to perform your current employment. | Detailed Reasoning - Self-education expenses: Section 8-1 of the Income Tax Assessment Act 1997 (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 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 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. 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. It is accepted that your educational courses enhanced the skills that were required for your employment. Consequently, the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income. You are therefore entitled to a deduction under section 8-1 of the ITAA 1997 for self-education expenses. You must reduce your claim by any amount that may be reimbursed by your employer. | Detailed Reasoning - Note: The self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936. An explanation on how this provision operates is provided at paragraphs 119 to 155 of TR 98/9, which can be accessed on the Tax Office website at www.ato.gov.au.