Private ruling: WRE - self-education
Published: August 2013
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to claim a deduction for the credit card processing fee that you incurred when making a voluntary repayment of your HECS-HELP debt? | A1: No.

Relevant facts and circumstances: You made a voluntary payment to your HECS-HELP debt on your credit card. You were charged credit card processing fees for the repayment.

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. The deductibility of self education expenses falls for consideration under section 8-1 of the ITAA 1997. However there is a specific section that deals with the deductibility of HECS-HELP fees. You will be obliged to make payments (either as voluntary payments or as part of your income tax assessment) under HECS-HELP. Paragraph 26-20(1)(cb) of the ITAA 1997 specifically prevents a deduction for payments made to reduce a debt to the Commonwealth under Chapter 4 of the HESA 2003. In your case, even though you incurred the credit card fee as a result of repaying your HECS-HELP debt the expenses is only deductible to the extent that your HECS HELP debt was deductible. As paragraph 26-20(1)(cb) of the ITAA 1997 specifically prevents a deduction for this repayment you are not eligible to claim a deduction for the credit card processing fee under section 8-1 of the ITAA 1997.

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