Private ruling: Self-education expenses
Published: August 2011
Ruling period: Year ended 30 June 2011 | Year ended 30 June 2012
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for self-education expenses? | A1: No. | Q2: Is the fee help paid by you a self-education expense? | A2: No.

Relevant facts and circumstances: You have completed an undergraduate course. After completing this course you decided to undertake a postgraduate course to expand your knowledge. You have paid fee help in relation to the postgraduate course. You are employed in a different profession. You submit that some elements of your undergraduate and postgraduate courses covered aspects of your current work duties.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 and | 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 details the circumstances under which a deduction is allowable for self-education expenses. Self-education expenses are an allowable deduction if a taxpayer's income earning activities are based on the exercise of a skill or specific knowledge and the subject of the self-education enables the taxpayers to maintain or improve upon that skill or knowledge (paragraph 13 of TR 98/9). If the study of self-education objectively leads to, or is likely to lead to an increase in a taxpayer's income from their current income earning activities in the future, a deduction is allowable (paragraph 14 of TR 98/9). However, no deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment, to obtain new employment, or to open up a new income-earning activity (whether in business or in the taxpayer's current employment). This includes studies that relate to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income. You are not currently employed in the field in which you are undertaking study. Therefore, your study is not to enable you to maintain or improve skills or knowledge in a profession you are already engaged in. While it is recognised that your study may assist you to perform some of your duties, the skill or knowledge acquired as a result of undertaking the postgraduate course goes beyond that required in your current employment. There is an insufficient connection between your studies and your income earning activities. It is considered that your self-education expenses are not incurred in the course of gaining or producing the income you derive from your current employment. Your self-education expenses are incurred in order to get future work, and they are incurred at a point too soon. Consequently, your self-education expenses are not deductible under section 8-1 of the ITAA 1997 | Detailed Reasoning - Fee help: Paragraph 24 of TR 98/9 explains that higher education contribution payments are not deductible under section 26-20 of the ITAA 1997. Student contributions to a higher education provider and payments to reduce a HELP debt (for example, a HECS-HELP debt, a FEE-HELP debt, an OS-HELP debt or a VET FEE-HELP debt) or a financial supplement debt are not deductible, regardless of how the payment is made. Therefore, the FEE-HELP expenses you have incurred in relation to your postgraduate course are not a deductible self-education expense.

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