Private ruling: Self-education expenses
Date of advice: 6 February 2017
Published: July 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in relation to undertaking a self-defence course (the course)? | A1: No.

Relevant facts and circumstances: You work as a relevant Officer. As a relevant Officer you are at times required to use self-defence techniques to protect yourselves. You received some basic self-defence techniques during your initial training. However you received no regular or ongoing self-defence training. You have undertaken the course to improve on the self-defence training received through your employment. You have incurred expenses relating to undertaking 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 except where the outgoings are of a capital, private or domestic nature. It is a long-standing principle that section 8-1 of the ITAA 1997 is not satisfied merely by demonstrating some casual connection between the expenditure and the derivation of income. What must be shown is a closer and immediate connection. The expenditure must be incurred in the course of gaining or producing assessable income. The Commissioner's view on the deductibility of self-education expenses is contained in Taxation Ruling TR 98/9. Paragraph 13 states 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. (emphasis added) In your case, you have advised that as relevant officers you are at times required to use self-defence techniques/knowledge to protect yourselves, and the course will maintain/improve on that knowledge. Whilst the skills acquired through the course may enable you to protect yourself against violent individuals you may interact with during the course of employment, it is the Commissioner's view that the skill of your income earning activity is not based on martial arts/self-defence knowledge. As such the study is too general in terms of your income earning activity as a relevant Officer. Paragraph 42 states that if a course of study is too general in terms of the taxpayer's current income-earning activities, the necessary connection between the self-education expense and the income earning activity does not exist. Therefore the expenses incurred in undertaking the course are not an allowable deduction under section 8-1 of the ITAA 1997.