Private ruling: Work related self-education expense
Date of advice: 16 February 2017
Published: July 2017
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019
Date scheme commenced: 1 July 2016

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

Relevant facts and circumstances: You are an Australian resident for tax purposes. Your current position is that of a manager. You have stated in your professional development plan (PDA), you are intending to improve your skills by completing a Masters Business Administration (Executive) course. Your current employment description includes a number of responsibilities relating to your MBA's listed course subjects. Your current employer has stated that they believe completing the course will likely improve your skills in your current position. Your employer has agreed to provide you with paid study leave You are currently enrolled to commence the course.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1936 section 82A Summary | The self-education expenses, including course fees, incurred in undertaking this program have the necessary and relevant connection with the earning of your assessable income and are deductable under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). Detailed reasoning | Section 8-1 of the 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 (TR 98/9) provides the Commissioner's view for the circumstances under which self-education expenses are allowable as a deduction. | TR 98/9 provides that 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). | Similarly, 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, a deduction is allowable. | Application to your circumstances | You will be undertaking a course in Master of Business Administration (Executive) including subjects for use in carrying on your income earning activities as a manager. | In your case, there is sufficient connection between the courses you will be completing and your income producing activities at the time as stated by your employer. You will undertake the course to enhance your existing capabilities, skills and knowledge that are required in the performance of your current employment as a manager. | Consequently, the self-education expenses, including course fees, incurred in undertaking this course that have the necessary and relevant connection with the earning of your assessable income and are deductable under section 8-1 of the ITAA 1997. | ATO view documents | Taxation Ruling TR 98/9