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

Ruling: Q1: Are you entitled to claim a deduction for self education expenses incurred in studying for a Bachelor of Nursing? | A1: No

Relevant facts and circumstances: You are studying for a Bachelor of Nursing. You are employed as an assistant nurse at a nursing home for the aged. Your job involves showering, toileting, feeding and dressing the patients. You are in Australia on a student visa which is valid until 201X. You have provided a copy of your visa (including conditions) which forms part of this ruling. The conditions of your visa include the requirement that you must not work for more than X0 hours per week when your course of study is in session and that you must not engage in work before your course of study initially commences. You completed a Certificate III in Aged Care to obtain the necessary qualifications to do your current job. After you complete your Bachelor of Nursing degree you expect to be promoted from assistant nurse to registered nurse in aged care.

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 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. 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). 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. However, no deduction is allowable for self education expenses if the study is designed to enable a taxpayer to open up a new income-earning activity, whether in business or in the taxpayers current employment. Such expenses of self education are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (see Federal Commissioner of Taxation v. Maddalena (1971) 45 ALJR 426; (1971) 2 ATR 541; 71 ATC 4161; and paragraphs 15, and 48 62 of TR 98/9). In your case you already have the necessary qualification, being a Certificate III in Aged Care, to carry out your current job. Your Bachelor of Nursing studies are not necessary to maintain or improve your existing skills or knowledge used in your current income earning activity. Nor can it be said that the subject of your nursing studies will objectively lead to, or is likely to lead to, a future increase in your income from your current income-earning activity. Your nursing degree will enable you to be employed as a registered nurse which is considered a new income-earning stream. Therefore, expenses relating to your nursing studies are considered to be incurred at a point too soon to be regarded as incurred in gaining or producing assessable income and the expenses are not deductible.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.