Private ruling: Self-education expenses
Date of advice: 22 March 2021
Published: February 2022
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in renewing and upgrading your existing helicopter pilots' licence? | A1: Yes. | Q2: Are you entitled to a deduction for self-education expenses for a training course you plan to undertake to upgrade your existing night vision imaging qualification? | A2: Yes.

Relevant facts and circumstances: You are a qualified pilot. You are a Training and Checking Pilot and Designated Check Pilot (DCP) for certain categories. You are also qualified as senior Night Vision Imaging Systems (NVIS) pilot. You are employed as a pilot. Your offer of employment required you at all times to hold a current home country licence. You enrolled in a training course to renew your existing qualification. You also enrolled in a training course to allow you to fly the aircraft in solo and dual pilot mode, as the situation requires. You paid for the training courses. You intend to become certified for a NVIS instructor approval (Instructor Rating Add on). No date has yet been confirmed for the NVIS course. You will study part time unless you can get leave from your employer.

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) 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 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. A deduction is allowable for self-education expenses if a taxpayer's 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 (paragraph 13). 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 their current income earning activities in the future, a deduction is allowable (paragraph 14). However, no deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment or to obtain new employment. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (paragraph 15). In your case, you are employed as a pilot. You have, and will, undertake training to renew your pilot's license and to improve your skills to fly different models. It is accepted the study meets the requirements detailed in Taxation Ruling TR 98/9. Therefore, you are entitled to a deduction for your self-education expenses.