Private ruling: Self-education
Published: May 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015
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 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 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). In your case, you are employed as a professional and you are attending a Masters while you are on leave without pay. Your employer has guaranteed your position for you when you return to Australia. It is considered that sufficient nexus exists between your employment and the course and that your study will maintain or improve your skills or knowledge. Therefore, you are entitled to a deduction for tuition fees, airfares, books and equipment.

You are undertaking a Masters degree overseas. | Your employer supports your study and has granted you leave without pay and have guaranteed a position for you when you return to Australia. | You will incur expenses for tuition fees, airfares, books and equipment.