Private ruling: Self-education expenses.
Date of advice: 15 November 2018
Published: March 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you claim your out of pocket self-education expenses? | A1: No.

Relevant facts and circumstances: ● You are an overseas citizen. ● You are an Australian resident. ● You are currently employed full time. ● You are eligible for a Commonwealth supported place at University. ● You are not eligible for Higher Education Contribution Scheme-Higher Education Loan Programme (HECS-HELP). ● You have a Diploma and X years post-graduate experience. ● You are planning to study various subjects. ● This degree will assist you to become registered in your field in the future and hold you in higher regard for more senior roles.

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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business 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 ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). 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. No deduction is allowable for self-education expenses if the study is designed to enable the taxpayer to get employment, to obtain new employment or to open up a new income earning activity, whether in business or in the taxpayer’s current employment. If the studies relate to a particular profession, occupation or field of employment in which you are not yet engaged, the expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (FC of T v. Maddalena 71 ATC 4161; (1971) 2 ATR 541) ( Maddalena’s case ). In your case, it is considered that your studies are not directly related to your current income earning activities and will be undertaken at a point too soon.