Private ruling: work related expenses
Published: December 2013
Ruling period: Year ended 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 24 February 2013

Ruling: Q1: Are you entitled to a deduction for self-education expenses? | A1: Yes.

Relevant facts and circumstances: You are employed by in a particular entity. You commenced your employment some years ago. In your current employment you are required to manage a complex project. Your employer encouraged your management studies. You started a course to gain a qualification in a recent year. You have undertaken the course in order to increase your personal knowledge of the particular business and to be an effective leader and manager. You are being supported by the relevant scheme at a certain level which means that it is considered directly related to your current or future employment. The overall course fee is $xxx,000 plus travel expenses for the overseas study tour component of the course. The employer has paid $xx,000 directly to the particular school. They will reimburse a total of $x,000 prior to the completion of the course. You paid $xx,000 to the school and the remaining will be paid via FEE-HELP.

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

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 8-1 of the Income Tax Assessment Act 1997 states that you can deduct from your assessable income any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income, except where the loss or outgoing is 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. A deduction is allowable for self education expenses 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 ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). Taxation Ruling TR 98/9 also states that 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, the self-education expenses are allowable as a deduction. In your case you are studying a business course. It is accepted that this course will maintain and enhance the skills that are required in the performance of your current employment activities. Consequently, as there is the necessary connection between the course and your current income-earning activities you are entitled to claim a deduction for your course expenses under section 8-1 of the ITAA 1997. | Detailed Reasoning - Additional information: Please note that the self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936. An explanation on how this provision operates is provided at paragraphs 119 to 155 of TR 98/9, which can be accessed on the Tax Office's website at www.ato.gov.au . You are only entitled to a deduction for the expenses that you have incurred. That is, you must reduce the expenses by the amount of reimbursement from your employer.