Private ruling: Self-education
Published: November 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for self education expenses? | A1: No.


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, or relate to the earning of exempt income. Taxation Ruling TR 98/9 discusses circumstances in which self education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the self education enables the taxpayer to maintain or improve that skill or knowledge, the self education expenses are allowable as a deduction. The decision in FC of T v. Maddalena 71 ATC 4161; 2 ATR 541 also supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. You work as a construction manager. Although you may gain some knowledge and skills from the subjects taken that could be of some assistance in your work, the content of the program suggests that the predominant focus is to provide the skills for property investing and development rather than for the management of existing projects. It is considered that there is an insufficient connection between the skills and knowledge required in your duties and the course that you have undertaken. As there is an insufficient nexus between the course of self education and your income earning activities, the self education expenses associated with the course are not incurred in earning your assessable income. Consequently you are not entitled to a deduction for the expenses under section 8-1 of the ITAA 1997.

Relevant facts: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: | · the application for private ruling dated early October 20XX; | · your email sent on early November 20XX containing the course description and content | · your email sent on early November 20XX with attached position description. | You were a construction manager. | You undertook Course and Mentoring Program as described in the email. | Your position description states that your position title was Project Manager and the basic objective of the position is to have knowledge of all issues that affect the progress of works and make experienced decisions that will maximise the project's success in terms of profitability, efficiency, contract period and client relations.