Private ruling: Self-education expenses
Date of advice: 27 October 2015
Published: October 2015
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 2014

Ruling: Q1: Can you claim a deduction for tuition fees and text books for the financial year ending 30 June 20XX? | A1: Yes.

Relevant facts and circumstances: You are employed. You have enrolled in a course at a university. The course will further develop your skills and knowledge of your current employment. In addition, the subjects you will undertake in the course will expand your knowledge in areas relevant to your employment position. Your employer has provided you with study leave, annual leave and unpaid leave for the duration of the course. You paid the course fees in the 20XX financial year.

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 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). Further, paragraph 26 of TR 98/9 states that expenses relating to self-education which are compulsory and unavoidable, as well as those for which a need can be shown in terms of fulfilling the requirements of the course, are regarded as being 'necessarily incurred' and are expenses of self-education. It is considered that the study will maintain or improve your skill or knowledge used in your current income earning activity. Consequently you are entitled to a deduction for the course fees incurred.