Private ruling: Self-education expenses after resignation
Date of advice: 13 November 2018
Published: February 2019
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can I claim the full amount of my self-education expenses? | A1: 

Relevant facts and circumstances: You were employed full time as a safety specialist and coach. You commenced an advanced course in health and safety. This program was tied with your employment and your employer supported the course of study. This program runs for 12 months. You resigned from your position to devote more time to your studies. One year later after the completion of your studies, you were awarded the designation of coach. The certificate has to be renewed annually. This certificate could entitle you to move to a higher pay scale.

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 (ITAA1997) states that you can deduct from your assessable income any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income, except where the loss or outgoing is of a capital, private or domestic nature. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses 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). TR 98/9 also states that 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, the self-education expenses are allowable as a deduction. In your case, there is a necessary connection between your course and when you were employed. You are entitled to claim a deduction while you were still employed for your course expenses under section 8-1 of the ITAA 1997. No deduction is allowable for the remaining time as you resigned from your position. You are not entitled to claim a deduction for self-education expenses for the period of time you were not employed as there was nexus to your employment at the time.