Private ruling: Self-education expenses
Date of advice: 30 July 2015
Published: July 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for your course fees as a self-education expense? | A1: No. | Q2: Are you entitled to a deduction for other expenses relating to your course as self-education expenses? | A2: Yes.

Relevant facts and circumstances: You are employed. You are enrolled at university to undertake a Masters. The course is related to your employment. You have a Commonwealth supported place at university. You pay your student contribution upfront. You have incurred other expenses in relation to your course.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1. | Income Tax Assessment Act 1997 Section 26-20.

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, relate to the earning of exempt income or a provision of the ITAA 1997 prevents it. Taxation Ruling TR 98/9 states self-education expenses are allowable as a deduction 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. | Detailed Reasoning - Course fees: TR 98/9 explains at paragraph 24 that a student contribution amount or debt repayment amount specified in section 26-20 of the ITAA 1997 is not an allowable deduction under section 8-1 of the ITAA 1997. Subsection 26-20(1) of the ITAA 1997 prevents a deduction for certain assistance provided to students. You cannot claim a deduction for: • a student contribution amount within the meaning of the Higher Education Support Act 2003 paid to a higher education provider, or • a payment made to reduce a debt to the Commonwealth under Chapter 4 of that Act This is whether the fees are paid up front as a discounted amount, or deferred for payment at a later date in an annual income tax assessment. In your case, you studied Commonwealth supported subjects with a student contribution amount. Subsection 26-20(1) of the ITAA 1997 denies a deduction for these expenses. Therefore you are not entitled to claim a deduction in respect of the course fees. | Detailed Reasoning - Other expenses: In your case, it is considered that the course will increase your skills and knowledge in your current income earning activity. Therefore, you are entitled to a deduction for the cost of text books and stationery.