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

Ruling: Q1: Can you claim a deduction for the expense incurred to defer your university studies? | A1: Yes

Relevant facts and circumstances: You are employed as an accountant. You were enrolled in a Bachelors Degree course for Semester X, 20XX. You incurred expenses of $XXX to defer the course to Semester X, 20XX. The deferral fee ensures your place in the course will be available in Semester X, 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 and Income Tax Assessment Act 1936 Section 82A.

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). The types of self-education expenses that are generally allowable are noted at paragraph 23 in Taxation Ruling TR 98/9. These include, among other things, course or tuition fees in attending an educational institution. It is accepted that the study of a Bachelors Degree would enhance the skills you would be required to have in your current profession. The expense incurred was required to ensure your position in the course was secured for you to continue your studies in semester X, 20XX. Consequently, the self education expense incurred has the necessary and relevant connection with the earning of your assessable income. You are therefore entitled to a deduction for the deferral fees under section 8-1 of the ITAA 1997.

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