Private ruling: Self education expenses
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for self education expenses? | A1: No.


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 circumstances in which self education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the self education enables the taxpayer to maintain or improve that skill or knowledge, the self education expenses are allowable as a deduction. The decision in FC of T v. Maddalena 71 ATC 4161; 2 ATR 541 also supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. You work as a Coordinator. Although you may gain some knowledge and skills from the subjects studied that could be of some assistance in your work, the predominant focus of the course is to provide the skills for people working in the chosen field. While we accept that your income may increase as the result of having completed the course, it is considered that this will be because you change from your position to that of a X and not because you are doing additional work in your role. You have stated that you have been able to ease the load of the team. This confirms that there is a specialist area devoted to X which is separate from the skill set required in your role. When comparing your employment duties against the course you are undertaking, it is considered that there is an insufficient connection between the skills and knowledge required in your current duties and the course that you have undertaken. Consequently you are not entitled to a deduction for the expenses under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | You have undertaken a course. | As the result of undertaking the study, you have been able to ease the workload of the team.