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

Ruling: Q1: Are you entitled to a deduction for self-education expenses? | A1: 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. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business, 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). According to Taxation Ruling TR 95/20 Income tax: employee performing artists - allowances, reimbursements and work-related expenses , states that a deduction is allowable for the cost of training to maintain existing skills or to acquire or improve related skills. This is so even if the training is undertaken between engagements. The nature of the entertainment industry is such that an employee performing artist may have a number of employers during a year and there may be regular periods between engagements where no income is earned. As Senior Member Roach observed in Case W39 89 ATC 395; AAT Case 5073 (1989) 20 ATR 3523 (ATC at 397; ATR at 3526): '...it is not essential for treatment that, when an expense is incurred by a person as an employee rather than as a self-employed person, the person be concurrently employed.' In your case, while you will not be concurrently employed, it is accepted that the program is directly related to producing your assessable income. You are therefore, entitled to a deduction for expenses relating to attending the Program.

Relevant facts: You are a performing artist registered full-time with a management agency. | You are undertaking a Program overseas. | You have asked your agency not to book any engagements for the period of the Program.