Private ruling: Self-education expenses
Date of advice: 23 August 2017
Published: December 2017
Ruling period: Year ended 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for self-education expenses? | A1: Yes. | Q2: Are you entitled to a deduction for tuition fees payable under specific FEE-HELP? | A2: Yes. | Q3: Can you claim a deduction for compulsory repayments made to your specific FEE-HELP debt? | A3: No.

Relevant facts and circumstances: You are employed in a construction area. You are studying a course which relates to your employment. You are paying for the course with specific FEE HELP. You have a specific FEE HELP debt.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 26-20

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 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. Similarly, 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, a deduction is allowable. In your case, it is accepted that the Diploma will maintain or enhance the skills that are required in the performance of your current employment duties. Consequently the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductible. | Detailed Reasoning - FEE-HELP: The tuition fee can be claimed in the financial year in which the expense is incurred. FEE-HELP and specific FEE-HELP was introduced by the Commonwealth to provide assistance to students who are not supported by the Commonwealth to pay course fees. When you pay your course fees by specific FEE-HELP, you are entitled to deduct the expenses when they are originally incurred (subject to the above deductibility tests). However you are not entitled to a deduction for the repayment of the specific FEE-HELP debt itself (Section 26-20 of the ITAA 1997). As you have met the requirements for eligibility for a deduction for self-education expenses, the whole course fee is deductible when it is incurred. However, as stated above, you are not entitled to claim a deduction for repayments of the specific FEE-HELP debt.