Private ruling: Self education expenses
Published: December 2013
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to claim a deduction for self-education expenses? | A1: Yes | Q2: Are you entitled you to claim a deduction for the decline in value for equipment purchased in relation to your work activities? | A2: Yes


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. Self Education expenses 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. 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. In the case of your employment as a consultant specialising in a particular field it is accepted that these courses will enhance the skills that are required in the performance of your employment activities. It is considered that a sufficient connection exists between these courses and your current duties. You are therefore entitled to a deduction under section 8-1 of the ITAA 1997 for self-education expenses. Decline in value Division 40 of the ITAA 1997 contains provisions which allow you to claim a deduction for the decline in value of depreciating assets. In your case you have purchased equipment used in relation to your work activities. Where the equipment is used for income producing purposes and costs more than $300, a deduction representing the decline in value is allowed under Division 40 of the ITAA 1997. An immediate deduction is allowable for the items costing $300 or less.

Relevant facts: You work as an independent consultant to industry and government specialising in a particular field. | You have been employed by a number of specialist companies focussing on your particular field related applications and systems. | More recently you have been contracted to industry as a specialist to assist in development of training systems and the devices that are used to deliver that training. | To succeed in performing the consultancy activities in this specialised field, the necessary knowledge, skills and experience needs to be regularly updated to remain abreast of the developments within your industry. | As part of a wide spectrum of actions to update your knowledge, skills and current experience in your industry, you have participated in some practical activities that are targeted at refreshing and improving direct skills. | · Regulatory compliance activities | You have incurred expenses for this training and the purchasing necessary equipment in relation to your activities.