Private ruling: Self-education expenses
Published: September 2017
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for course fees, textbooks, and stationery as self-education expenses? | A1: Yes.

Relevant facts and circumstances: You are employed in a senior management position responsible for: ● The marketing and communications function of the company ● Leading and managing a team of employees ● Managing a department budget ● Providing strategic advice to the Executive and Board, and ● Providing advice to the strategy, operations and human resources departments on issues affecting their area of responsibility. Your employer has set a performance objective for you to undertake post-graduate studies in management to enhance your skills in the managerial and business operations aspects of your role. The achievement of your performance objectives is tied to your eligibility to receive salary increases and bonuses in your current role. Your employer will assist you to undertake this study through the provision of paid and unpaid study leave but the majority of your study will be undertaken in your own time, outside business hours. Your employer is not contributing to the costs associated with the study. You commenced an online self-education course. You have incurred expenses for course fees, textbooks and stationery.

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. Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. TR 98/9 provides that 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, the self-education expenses are allowable as a deduction. 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 considered that the study will maintain or improve your skill or knowledge used in your current income earning activity. Therefore, the expenses you incur for self-education are deductible under section 8-1 of the ITAA 1997.