Private ruling: Self Education Expenses
Date of advice: 12 April 2017
Published: September 2017
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in relation to your course? | A1: Yes

Relevant facts and circumstances: Your current position is a Consultant. You have stated you are intending to improve your skills as a national specialist by improving your ability to be a better manager, trainer, finance professional and leader by completing a course which is highly regarded in the industry. Your current list of duties that you are required to undertake includes: ● Build and develop the referral arrangement within a network of their advisers. ● The sole national consultant for the newly developed practices. ● Assist clients' financial needs in line with the strategic advice around debt strategies. ● Assist clients to apply and successfully obtain related finance with various lenders. ● Coach, educate and lead new financial advisers and current licensees to identify client debt needs and implement debt advice solutions. ● Develop high quality business relationships with all stakeholders including heads of department, practice managers and credit managers. ● Help develop debt advice text, mortgage fulfilment operating processes and develop and present training on debt advice and basic credit requirements to various planners for the national practice network.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1936 section 82A

Reasons for decision: Summary: Section 8-1 of the 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 (TR 98/9) provides the Commissioner's view for the circumstances under which self-education expenses are allowable as a deduction. TR 98/9 provides that 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. | Detailed Reasoning - Application to your circumstances: You will be undertaking a course. In your case, there is sufficient connection between the courses you will be completing and your income producing activities at the time as stated by you. You will undertake the course to broaden your existing capabilities, skills and knowledge that are required in the performance of your current employment as a Consultant. Consequently, the self-education expenses, including course fees, incurred in undertaking this course that have the necessary and relevant connection with the earning of your assessable income and are deductable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Additional information: In certain circumstances you may have to reduce your allowable self-education expenses by an amount. However you may have other types of expenses some of which are not allowable as a deduction that can be offset against the amount before you reduce the amount you can claim for allowable expenses. For more information on how to work out your self-education expenses, search for Quick Code (QC) 31970 at ato.gov.au .