Private ruling: self-education expenses
Date of advice: 16 September 2015
Published: September 2015
Ruling period: Year ended 30 June 2015.
Date scheme commenced: 1 July 2014

Ruling: Q1: Can you claim self-education expenses for your studies in a bachelor of X? | A1: No.

Relevant facts and circumstances: You work as an assistant X. You are not a registered or enrolled X. You are studying a bachelor of X. You have incurred expenses in your studies for course fees and travel.

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 (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 ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348. Taxation Ruling TR 95/15 specifically deals with self-education for Xs. • A deduction is allowable for self-education expenses if the education is directly relevant to the taxpayer's current income-earning activities. This particularly applies if a taxpayer's income-earning activities are based on skill/knowledge and the education enables him or her to maintain or improve that skill/knowledge. • A deduction is allowable if the education is likely to lead to an increase in the taxpayer's income from his or her current income-earning activities. • A deduction is not allowable if the education is designed to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity ( FC of T v. Maddalena 71 ATC 4161; 2 ATR 541). • Self-education includes courses undertaken at an educational institution (whether leading to a formal qualification or not), attendance at work-related conferences or seminars, self-paced learning and study tours. • Self-education expenses include fees, travel expenses (e.g., attending a conference interstate), transport costs, books and equipment. A similar case was discussed in ASSEFA v. Commissioner of Taxation [2009] AATA 2 in which an assistant X was disallowed a claim for self-education expenses. It was found that a X assistant is not the same as a registered X or enrolled X. "Based on the ASCO descriptions, there is a significant difference between the position of Enrolled X and Registered X, on the one hand, and Personal Care Assistant/X Assistant on the other hand. In addition to the requirement of registration or licensing, the Enrolled X and the Registered X have entrusted to them a range of activities that could not be undertaken by the X Assistant. At its simplest level, the Enrolled X and the Registered X are Xs; the X Assistant, or Personal Care Assistant, is not." The case compared the roles of a X assistant to the roles of an enrolled or registered X using extracts from an Australia Bureau of Statistics publication. The current versions of this publication remain unchanged. The tribunal found that - "A person does not need to have a degree in X, or to be studying for such a degree, to be employed as a Personal Care Assistant or X Assistant. The ASCO extract for "Personal Care and X Assistants" indicates the "entry level requirement" is an AQF Certificate II or higher. Neither of Mrs Assefa's employers required her to be undertaking the degree course: ST4-122 and ST5-124." Application to your circumstances The Tribunal has concluded that an enrolled X and a registered X were Xs whereas a X assistant, or personal care assistant, were not. In your case, it can be noted that the qualification toward which you are studying are mandatory for a registered X but not for an assistant in X. The expenses are not related to your current income earning activities but future activities. Studies undertaken in order to obtain employment in a new field are considered to have been incurred at a point too soon to be regarded as incurred in gaining or producing assessable income and such expenses are not deductible under section 8-1 of the ITAA 1997.