Private ruling: Self-education expenses
Date of advice: 30 April 2018
Published: July 2018
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you claim self-education expenses in relation to your Enrolled Nursing course? | A1: No

Relevant facts and circumstances: You are employed as a Personal Care Assistant. You are currently undertaking a course in Enrolled Nursing at TAFE. The course enhances your current skills as a Personal Care Assistant.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1

Reasons for decision: Summary: You are not entitled to a deduction for your self-education expenses as the expenses are incurred to open up a new income earning activity as an enrolled nurse. Work-related expenses generally fall for consideration under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). This section allows a deduction for losses and outgoings which are incurred in the course of gaining or producing assessable income, unless the losses or outgoings are of a capital, private or domestic nature. The Commissioner’s view on the deductibility of self-education expenses is contained in Taxation Ruling TR 98/9. In accordance with paragraphs 13 and 14 of TR 98/9, expenses of self-education will satisfy the requirements of section 8-1 of the ITAA 1997 if: ● a taxpayer’s income earning activities are based on the exercise of a skill or some specific knowledge, and the course of self-education enables the taxpayer to maintain or improve that skill or knowledge; or, ● the study of a course of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer’s income from their current income earning activity in the future. Therefore, provided there is sufficient connection between a course of self-education and current income earning activities, you are entitled to claim a deduction for your self-education expenses. However, as stated in paragraph 15 of TR 98/9, self-education expenses will not be deductible if the study is intended to: ● enable you to get employment, ● enable you to obtain new employment, or ● to open up a new income-earning activity (whether in business or in your current employment). This includes studies relating to a particular profession, occupation or field of employment in which you are not yet engaged. The expense is considered to be incurred at a point too soon to be regarded as incurred in gaining or producing assessable income ( FC of T v. Maddalena 71 ATC 4161; 2 ATR 541). In the recent case of Assefa v FC of T [2009] AATA 2 ( Assefa's case ), it was considered whether studying a course of education in order to advance to a higher classification of nursing was opening up a new income earning activity. The taxpayer in this case is employed as a personal care assistant while studying to become an Enrolled Nurse. The Administrative Appeals Tribunal held in Assefa's case that no deduction was allowable for the self-education expenses. It was determined that there was a significant difference between the position of enrolled nurse on one hand, and personal care assistant/nursing assistant on the other. The taxpayer was not considered to be incurring the expenditure in gaining or producing her assessable income, but was studying towards their initial qualification as an enrolled nurse. This decision can be directly applied to your circumstances as you are also a personal care assistant studying to become an enrolled nurse, which is considered a new income earning activity. While we acknowledge that the knowledge gained from the course may have been of some assistance in your occupation as a personal care assistant, the predominant focus of the course is to provide the skills and qualifications to become an enrolled nurse. The subjects studied provided you with skills and abilities in advance of those you required in your employment as a personal care assistant. As a consequence, there is not sufficient connection between your current income earning activities and the enrolled nursing course you are undertaking, to make the associated expenses deductible. Therefore, based on the information provided, your self-education expenses claim has been disallowed under section 8-1 of the ITAA 1997.