Private ruling: Deductibility of self-education expenses
Date of advice: 19 January 2017
Published: June 2017
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20YY | Year ended 30 June 20ZZ
Date scheme commenced: 1 July 20WW

Ruling: Question and answer: | Are you entitled to claim a deduction for self-education expenses? | Yes.

Relevant facts and circumstances: You are employed as a medical professional. You also hold adjunct senior lecturer positions at a number of tertiary education institutions. This entails undertaking supervision of certain courses and teaching both undergraduate and post graduate students in medicine and medical procedures as well as other professionals in training and master courses to equip already practicing professionals to take up new techniques. In addition you are also a chairperson of an advisory committee. In this capacity, you advise the relevant institution on matters relating to and provide oversight on a broad range of medically related issues including practitioner competence and credentialing, safety and quality as well as operational matters relating to providing quality comprehensive care. You have practised in both the public and private health system. You have your own practice entity that you have co-owned for a number of years, and whom you are employed by. Together with a number of practitioners, you have the responsibility for administrating the practice. The practice has a number of staff administrative, several specialist practitioners as well as various health and nurse specialists to provide a range of medical services in a holistic manner using best practice principles. You commenced a medical course that contains a number of course units that directly relate to the deriving of you assessable income. The course provides you with tools to trouble shoot analyse and have insight to handle difficulties and conflicts within a team. In addition it provides improved team dynamics lead to better performance and cost saving and efficiencies across the board. You have incurred expenses in undertaking this course of study. The course is fee paying and you are receiving Fee Help.

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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business, discusses the circumstances under which self-education expenses are allowable as a deduction. Tax Ruling TR 98/9 provides that 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. 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. | Detailed Reasoning - Application to your circumstances: You are employed in the medical profession and hold a number of external education positions. You are also a co-owner of a practice. You commenced a related course. From the information that you have provided the content of this course is based on the knowledge and skills that you are required to exercise in the number of roles that you for fill in your income earing activities. Further the Commissioner is satisfied that the course that you are undertaking enables you enhance your skills and knowledge necessary to conduct the duties that you are required to exercise in your income earning activities. Therefore consistent with the principles established in TR 98/9 the expenses that you have incurred in undertaking this course are deductible. Accordingly, you are entitled to a deduction for the expenses that you have incurred in undertaking the medical course under section 8-1 of the ITAA 1997.