Private ruling: Self-education expenses
Date of advice: 29 November 2016
Published: April 2017
Ruling period: Year Ending 30 June 20XX | Year Ending 30 June 20YY | Year Ending 30 June 20ZZ
Date scheme commenced: 01 July 20WW

Ruling: Q1: Are you entitled to a deduction for the self-education expenses incurred in undertaking a specific Degree? | A1: Yes

Relevant facts and circumstances: You are currently employed. Your employer encouraged you to undertake the course and agreed to pay a portion of the fees. You commenced the degree. On completion of the degree, you will continue to work for the same employer. The degree subjects have been identified to directly relate to your current job role

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 the course of gaining or producing the assessable income, but are not allowable to the extent that they are 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). TR 98/9 outlines that your expenses of tuition fees, student union fees, textbooks and stationary are all deductible subject to the general tests outlined in section 8-1. You are currently employed. It is accepted that the degree will enhance the skills you require in this position. After completion of the course, you will have the ability to earn an increase in income from your current employment. This satisfies the test of the expense being connected to your assessable income. In your case, your course will be directly related to your assessable income. In addition to your tuition fees it is expected that you will incur other relevant self-education expenses. Given that your course will be related to your current employment any relevant self-education expenses incurred, including your tuition fees will be an allowable deduction under section 8-1 of the ITAA 1997.