Private ruling: investment expenses
Published: December 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are the fees incurred to undertake a course a deductible expense in relation to your dividend income? | A1: Yes.

Relevant facts and circumstances: You have earned dividend income in the 2011 financial year. You completed a course relating to the stock market in the 2011 financial year. The total cost of the course was approximately $300. The value of your share portfolio at the time you undertook the course was approximately $30,000.

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. ATO ID 2003/324 discusses the deductibility of expenses incurred to attend an investment seminar. If the expenditure relates to establishing a strategy or structure for an investment, it is incurred at a point too soon to be incidental and relevant to a taxpayer's income earning activities. However, if the seminar relates to the management and maximisation of income from current investments held by the taxpayer, then the expenditure will be considered a cost incurred to manage that investment. In your case you incurred expenses to attend a course regarding investing in the stock market. You already held a significant stock portfolio prior to commencing the course. The expense is considered a cost relating to the management of your investment and has been incurred in the course of earning assessable income from your stock portfolio. Therefore, you are entitled to a deduction for the course fees incurred under section 8-1 of the ITAA 1997.

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