Private ruling: Self-education expenses
Published: June 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the costs associated with gaining an additional licence? | A1: Yes.

Relevant facts and circumstances: You are employed full time assistant to a professional. As part of your duties you are expected to monitor and assist the operation in all respects. You currently hold a licence which allows you to perform your current role. Gaining the additional licence will open promotional opportunities within the company. To qualify for the additional licence you are required to undertake a specific amount of hours of training. In order acquire the necessary hours to qualify for the additional licence, you will incur expenses.

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 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 95/19 applies to employees in the airline industry and deals with work-related deductions. Paragraphs 109 to 117 of this ruling provide a summary of the key points in respect to the deductibility of self-education expenses, as contained in Taxation Ruling TR 98/9. TR 98/9 states that self-education expenses are deductible where they have a relevant connection to the taxpayer's current income earning activities. 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 subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, or · 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. In your case, you are employed as an assistant to a professional. You hold a licence but need to obtain an additional licence before you can be promoted to command positions. You are incurring expenses to enable you to undertake the training. The training you undertake will allow you to improve your skills in general. These skills are directly related to your employment and therefore to your current income earning activities. Additionally, gaining additional licence is likely to lead to an increase in the income you earn because you will be eligible for promotion. Therefore, the expenses you incur are legitimate self-education expenses for which for are entitled to a deduction under section 8-1 of the ITAA 1997.

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