Private ruling: Self-education expenses
Date of advice: 11 January 2017
Published: June 2017
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in relation to the Specific Certificate Competency course (the course) undertaken? | A1: Yes.

Relevant facts and circumstances: You are currently employed as a tradesman on sea vessels. It is now a requirement from the Relevant Safety Authority under the Related Agreement 2010 that all sea going tradesman be endorsed with the Specific Certificate of Competency. This is in addition to the Certificate of Safety Training. Without this endorsement you cannot work on any foreign vessels either in or outside Australian waters. Qualifying for the Competency Certificate requires undertaking training courses as set down by Relevant Safety Authority and undertaking the courses through recognized training providers such as TAFE or Related Colleges. You incurred expenses in undertaking the course during the 20XX-YY financial year. You do not receive financial assistance in meeting the costs of the course.

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, or are necessarily incurred in carrying on a business for the purpose of 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 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). In your case, it is accepted that the course will maintain or enhance the skills that are required in the performance of your current employment duties. Consequently the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductible.