Private ruling: Self-education expenses
Published: February 2015
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for self-education expenses? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are employed as a trainer. You have previously undertaken a Graduate Certificate You are unable to formally use this qualification as the governing body of your chosen specialty stipulated that you also need to have attained an undergraduate degree. You have commenced an undergraduate degree to fulfil this requirement. Once you have attained the undergraduate degree, your role will expand. Your pay rate should also increase.

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) states that you can deduct from your assessable income any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income, except where the loss or outgoing is of a capital, private or domestic nature. 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). Taxation Ruling TR 98/9 also states that 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, the self-education expenses are allowable as a deduction. In your case, you have completed a Graduate Certificate. In order for you to be able to formally use this qualification, you must also have attained an undergraduate degree. You are currently enrolled in an undergraduate degree to fulfil this requirement. You have stated that your job will expand on the completion of your degree which should increase your pay rate. Consequently, as there is the necessary connection between the course and your current income-earning activities you are entitled to claim a deduction for your course expenses under section 8-1 of the ITAA 1997. | Detailed Reasoning - Additional information: Please note that the self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936 . An explanation on how this provision operates is provided at paragraphs 119 to 155 of TR 98/9, which can be accessed on the Tax Office's website at www.ato.gov.au.