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

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 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. Course fees may be deductible even though they are charged to a FEE-HELP loan. However, payments to a FEE-HELP loan are not deductible. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business , discusses circumstances in which self-education expenses are allowable as a deduction. 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 brand manager. 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 to become a fully qualified psychologist. It is considered that there is an insufficient connection between the skills and knowledge required in your duties and the course that you have undertaken. As there is an insufficient nexus between the course of self-education and your income earning activities, the self-education expenses associated with the course are not incurred in earning your assessable income. Consequently you are not entitled to a deduction for the expenses.

Relevant facts: You are employed as a brand manager work in marketing. | You are undertaking a graduate diploma in psychology. | The fees for the course were charged to a FEE-HELP loan and the loan paid in the same year.