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

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in undertaking training courses? | A1: Yes.


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 discusses the circumstances under which self education expenses are allowable as a deduction. A deduction is allowable for self education expenses if a taxpayers 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 (see FC of T 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. In your case, it is accepted that the courses you undertook, maintained and enhanced the knowledge and skills that were required to perform your current employment. Consequently, the training courses had the necessary and relevant connection with the earning of your assessable income and are therefore deductible under section 8-1 of the ITAA 1997.

Relevant facts: You were employed full time. | In fear of losing your job, you undertook specific training to enhance your qualifications and broaden your skill set. | Your employer did not cover the costs of the training but were supportive of you undertaking these courses. | You are now employed on a contractual basis.