Private ruling: Self-education expense
Date of advice: 10 November 2015
Published: January 2016
Ruling period: Year ended 30 June 2015 | Year ended 30 June 2014 | Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Question and answer | Are you entitled to a deduction for the self-education expenses you incur for the course you are completing? | No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1. | Income Tax Assessment Act 1997 Subsection 6-5(4).

Reasons for decision: Summary: Section 8-1 of the 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 sets out the Commissioner's views on the circumstances in which self-education expenses are allowable as deductions. In general terms self-education expenses are deductible where they have a relevant connection with the taxpayer's current income earning activities. A deduction will not however be allowable if the study was to enable the taxpayer to gain employment or open up a new income earning activity. In these circumstances the expenses are incurred at a point too soon to be regarded as having been incurred in gaining or producing assessable income (paragraph 15 of TR 98/9; FC of T v. Maddalena 71 ATC 4161; (1971) 2 ATR 541). In your case, your self-education expenses were incurred by you in order to pursue your study. You did not incur these expenses in order to earn the internship income. Therefore, they were not incurred in gaining or producing assessable income for the purposes of section 8-1 of the ITAA 1997. This is consistent with the approach taken in TR 98/9 with regard to certain Commonwealth education assistance schemes (paragraphs 18 & 19 of TR 98/9). Furthermore, the self-education expenses were incurred by you for the purpose of qualifying yourself to enter a particular profession/calling and open up new income earning opportunities in that field. These expenses were incurred at a point too soon to be regarded as incurred in earning your assessable income. Consequently, as a student receiving assessable internship income, you are not entitled to a deduction for self-education expenses under section 8-1 of the ITAA 1997.

Relevant facts: You are employed as a student intern. | You were approached about the internship. | The internship is for a set number of years. | You are the first intern to go through the program. | You were/are employed by the employer but you must study. | The internship has specific responsibilities. | It is a requirement of the position that you complete the course through a college. | You receive 2 days paid employment: | • Standard superannuation, long service leave, holiday and family/sick leave. | • Personal development/training allowance. | You have provided a copy of your enrolment summary which sets out the units you must complete for the course. | The study will qualify you to work in a certain profession or calling. | You will not be employed by your current employer when you finish your study. | You have almost completed your study and have applied to become a #. It takes a long time for registration to go through. | You could work as a # at the end without registration but it would be difficult to obtain a position as you are not recognised until you are registered. | You plan to work in another field until your registration is finalised.