Private ruling: Self-education expenses
Date of advice: 28 April 2016
Published: June 2016
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Questions and answers: | Are you entitled to a deduction for self-education expenses? | Yes. | Are you entitled to a deduction for overseas travel and accommodation? | Yes.

Relevant facts and circumstances: You have been a long term employee at a large educational institution. Your duties include: • Overall responsibility for financial, administration and grounds for four campuses; • Development of KPI tools integral in the decision making process which allow for certainty in forward planning; • Presentation of monthly financial reports; • Implementation of cost control measures; • Development of critical incident plans; • Negotiations with unions; • Land acquisition; • Building development and refurbishment; • Management of consultants; • Developing and maintenance of wireless networks; • Developing and maintaining adequate insurance coverage. You completed a short course overseas. You incurred the following costs: • Program Fee $ • Accommodation/Taxi fares $ • Return Premium Economy Airfares $ You have not been reimbursed by anyone for these costs. Your employer encouraged you to undertake the course and provided you with study leave.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1. | Income Tax Assessment Act 1997 Section 26-20.

Reasons for decision: Summary: 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. In your case, it is accepted that the course will maintain or enhance the skills that are required in the performance of your current employment duties. Consequently the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductible. The cost of travel and accommodation expenses, when incurred in conjunction with a deductible self-education course are considered to be self-education expenses and therefore, deductible under section 8-1 of the ITAA 1997. If this travel and expenses includes a private portion then the amounts claimed will need to be apportioned accordingly. Only the work related portion of each expense is an allowable deduction.