Private ruling: Self-education
Date of advice: 29 July 2015
Published: July 2015
Ruling period: Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for self-education expenses? | A1: Yes. | Q2: Are you entitled to a deduction for tuition fees payable under VET FEE-HELP? | A2: Yes. | Q3: Can you claim a deduction for compulsory repayments made to your VET FEE-HELP debt? | A3: No.

Relevant facts and circumstances: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: • the application for private ruling, and • the documents provided with the application for private ruling. You have been studying an Advanced Diploma part-time. You received a Commonwealth Assistance notice for this course. These documents show amounts totalling $X were added to your VET FEE-HELP debt during the 2014-15 financial year. You expect to complete this course in 2015. You received a promotion and salary increase with your current employer as a result of your improved skills and knowledge. You received an government allowance. Your employer granted you study leave for this course because they believe it to be relevant to your role.


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 Advanced Diploma 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. | Detailed Reasoning - FEE-HELP: The tuition fee can be claimed in the financial year in which the expense is incurred. FEE-HELP and VET FEE-HELP was introduced by the Commonwealth to provide assistance to students who are not supported by the Commonwealth to pay course fees. When you pay your course fees by VET FEE-HELP, you are entitled to deduct the expenses when they are originally incurred (subject to the above deductibility tests). However you are not entitled to a deduction for the repayment of the VET FEE-HELP debt itself (Section 26-20 of the ITAA 1997). As you have met the requirements for eligibility for a deduction for self education expenses, the whole course fee is deductible when it is incurred. However, as stated above, you are not entitled to claim a deduction for repayments of the VET FEE-HELP debt.