Private ruling: Self education
Published: July 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for self education? | 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. In your case, you were not employed in the field that you studied. Therefore, it is considered that the study you undertook would open up a new income earning activity. Therefore, you are not entitled to a deduction for self education expenses.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | You were made redundant in a certain month in a recent year. | In the subsequent year, while unemployed, you completed a course. | Soon after, you commenced casual work in a different field. | You are seeking active employment as a professional.