Private ruling: Self-education expenses
Date of advice: 21 July 2015
Published: July 2015
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in obtaining your multi engine command instrument rating (MECIR)? | A1: Yes.

Relevant facts and circumstances: You have been employed as an engine flight instructor. You undertook a course to obtain your MECIR. The MEICR will allow you to obtain a position of multi-flight instructor with your current employer which will advance your career. You have incurred costs in undertaking the training course.

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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business 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). In your case, you are employed as a flight instructor. It is accepted that the study you have undertaken will enhance the skills that are required in the performance of your current employment duties. Consequently, the self-education expenses you have incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductable under section 8-1 of the ITAA 1997.