Private ruling: Self-education expenses - overseas study
Date of advice: 6 June 2016
Published: July 2016
Ruling period: 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Can you claim a deduction for university fees paid in connection with a self-education course at an overseas school? | A1: Yes.

Relevant facts and circumstances: You are employed by an Australian company commencing as a recruit in recent years. You have enrolled in the course at an overseas educational facility. The course will further develop your skills and knowledge of your current employment. In addition, the subjects you will undertake in the course will expand your knowledge in areas relevant to your employment position. Your employer has recommended that you undertake this course and is encouraging you to complete the course. Your employer has provided you with unpaid leave for the duration of the course. You intend to pay course and other fees in the 2015/2016 financial year.

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). Further, paragraph 26 of TR 98/9 states that expenses relating to self-education which are compulsory and unavoidable, as well as those for which a need can be shown in terms of fulfilling the requirements of the course, are regarded as being 'necessarily incurred' and are expenses of self-education. It is considered that the study will maintain or improve your skill or knowledge used in your current income earning activity. Consequently you are entitled to a deduction for the course fees incurred. You are entitled to deduct course fees for the period ending 30 June 2016.