Private ruling: Defence Force Australia - overseas travel for self-education
Date of advice: 5 February 2026
Published: 9 June 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are your overseas travel expenses allowable as a self-education deduction under section 8-1 of the Income Assessment Act 1997 (ITAA 1997)? | A1: No. It is determined that there is not sufficient nexus between your travel to overseas as self-education and your current income earning activities therefore, it is not accepted that the travel meets the requirements detailed in Taxation Ruling TR 2024/3 Income Tax: deductibility of self-education expenses incurred by an individual .

Relevant facts and circumstances: You joined the Australian Army in 19XX. From XX/XX20XX until XX/XX/20XX, you travelled overseas. You travelled alone. The purpose of your travel was to visit the battlefields which Australians were involved in. You did not use a tour guide to travel to the different battle sites. You hired a scooter and travelled to the sites yourself. You used your personal annual leave for the trip. You provided an itinerary of your overseas trip showing places you visited. You incurred expenses for the following: • Flights and Visas • Accommodation • Meals • Scooter hire and gear • Fuel • Parking • Ride share • International SIM • Neck pillow • Attractions • Shooting range • Miscellaneous • Total $X. You provided a duty statement for your job position at the time of your travels.

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) governs the deductibility of travel expenses, including expenses incurred in travelling overseas. To be deductible under section 8-1 of the ITAA 1997, a loss or outgoing must be relevant or incidental to gaining or producing assessable income. Taxation ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business sets out the circumstances in which self-education expenses are allowable as deductions for individuals under the Income Tax Assessment Act 1936 (ITAA 1936) and the Income Tax Assessment Act 1997 (ITAA 1997). It must have the essential character of an outgoing incurred in gaining assessable income or, in other words, of an income-producing expense ( Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 ATR 166) • there must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income ( Ronpibon Tin N.L.Tongkah Compound N.L. v. Federal Commissioner of Taxation (1949) 78 CLR 47; (1949) 8 ATD 431; (1949) 4 AITR 236), and • it is necessary to determine whether there is the requisite connection between the particular outgoing and the operations or activities by which the taxpayer most directly gains or produces his or her assessable income ( Charles Moore & Co (WA) Pty Ltd v. Federal Commissioner of Taxation (1956) 95 CLR 344; (1956) 11 ATD 147; (1956) 6 AITR 379. Federal Commissioner of Taxation v. Cooper (1991) 29 FCR 177; 91 ATC 4396; (1991) 21 ATR 1616. Roads and Traffic Authority of New South Wales v. FC of T (1993) 43 FCR 223; 93 ATC 4508; (1993) 26 ATR 76). Whether such a connection exists is a question of fact to be determined by reference to all the facts of the particular case. | Detailed Reasoning - Self-education expenses: Most self-education expenses are incurred voluntarily and to be allowable under section 8-1 of the ITAA 1997, the expenditure must be characterised as having been incurred in gaining or producing assessable income. | Detailed Reasoning - Overseas travel: The deductibility of your overseas travel needs to be considered under general self-education principles noted above and relevant case law. The leading case for expenses of this nature is the High Court decision in Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60; (1961) 12 ATD 348; (1961) 8 AITR 406 (Finn's case). That case involved a senior design government architect. He went on an overseas tour for the express purpose of studying current trends in architecture with a view to improving his prospects of future promotion. His employer requested him to travel to South America and reimbursed him for some of his expenses. The High Court found that the travel expenses were part and parcel of his employment. That connection was clear because his employer requested him to travel and provided financial assistance. The travel was also likely to lead to promotion. In AAT Case 4010 ; AAT Case V1 88 ATC 101 (Case V1), a music teacher was allowed a deduction for her overseas trip as the trip was seen to increase and update her knowledge as a music teacher. In this case, the taxpayer spent four months studying music under a scholarship followed by two months of study in a music academy in Finland. Taxation Ruling IT 2198 deals with allowable deductions for voluntary expenditure incurred by employee taxpayers. Paragraph 13 states that the Taxation Boards of Review have seen a number of teachers seeking income tax deductions for overseas travelling expenses. Most of the claims were rejected because the teachers were not able to establish a positive connection between the overseas travel and the performance of their duties of employment as teachers. In the ultimate the claims have been based on a general proposition that the overseas travel has made the taxpayers better able to carry out their duties which, of itself, is not sufficient to enable the expenditure to be allowed as a deduction. In the Board of Review Case R47 84 ATC 380; (1984) 27 CTBR (NS) Case 101, the taxpayer, a French language teacher, claimed a deduction for part of the expenses in travelling to France. The trip was not undertaken at the request of the taxpayer's employer. She asserted that the trip increased her teaching skills. The Board of Review stated that the fact that the taxpayer became a better teacher because of the trip did not mean that expenses were incurred in the course of gaining her assessable income as a teacher. The expenditure was incurred in relation to a period during which the taxpayer was without obligation to render service to her employer. Notwithstanding that her experience would be of value when she resumed performing the duties of her employment, the essentially recreational nature of the journey did not alter. In Case R94 84 ATC 628; (1984) 27 CTBR (NS) Case 147 a college librarian was disallowed overseas travel expenses in making a study tour of China organised by the Library Association. The benefits derived by the taxpayer might have made her a better librarian, but the nexus between the outgoings and deriving assessable income was too remote. The taxpayer voluntarily made the trip and the expenditure was essentially of a private nature. Case Q57 83 ATC 307; 26 CTBR (NS) Case 119 involved an art teacher who travelled to Greece and Crete to update her knowledge and to keep abreast of art concepts so as to maintain and improve the quality and content of the subject she taught. The board of review found that the costs associated with the travel were not incurred by the taxpayer in the process of carrying out her duties as a teacher. In Case Q83 83 ATC 418; (1983) 27 CTBR (NS) Case 11, the taxpayer, a high school French and Indonesian language teacher, travelled overseas with her husband. She claimed a deduction for travel expenses relating to time spent in France and Indonesia. The taxpayer conceded that promotion did not depend on travelling overseas. The Taxation Board of Review disallowed the taxpayer's claim. They found that even though language teachers can, in the course of ordinary tourist activities, derive benefits as teachers, this fact does not transmute tourist activities into business activities. Taxation Ruling TR 2020/1 Income tax: employees: deductions for work expenses under section 8-1 of the Income Tax Assessment Act 1997 sets out when an employee can deduct a work expense under section 8-1 of the Income Tax Assessment Act 1997 . For the purposes of this Ruling, 'work expense' means 'a loss or outgoing you incur in producing your salary or wages'. Paragraph 7 explains that an employee can only deduct a work expense under section 8-1 to the extent that: • it is incurred in gaining or producing assessable income (positive test) and also meets the 'negative tests' that: • the expense is not a loss or outgoing of capital • the expense is not private or domestic in nature • the expense is not incurred in relation to gaining or producing exempt or non-assessable non-exempt income, and • another provision of the tax law does not prevent deduction of the expense. | Detailed Reasoning - In gaining or producing assessable income: The following paragraphs discuss that for an expense to be an allowable deduction it needs be incurred in gaining or producing assessable income. 13. The pivotal element of section 8-1 for work expenses is the requirement that expenses be incurred 'in gaining or producing assessable income'. The High Court majority in Payne said it is well established that these words are to be understood as meaning incurred 'in the course of' gaining or producing assessable income, and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income. 16. The fundamental question is whether an expense is incurred in the course of earning employment income. This involves considering the proper scope of the particular taxpayer's work activities to determine if the circumstances of the expense have a sufficiently close connection to earning the employment income. 19. A deduction may be allowed if the particular employment context creates a close connection between the expenditure and the production of assessable income through work activities; that is to say, 'the occasion of the expenditure is to be found in the income-earning activity itself'. 22. The requirement that expenses be incurred in the course of producing assessable income means that it is not enough to show only that there is some general link or causal connection between expenditure and the production of income. The expenditure must have a sufficiently close connection to performance of the employment duties and activities through which the employee earns income. | Detailed Reasoning - Relevance of employer requirements: The following paragraphs detail the relevance of employer requirements when determining if the expense incurred is an allowable deduction. 31. Although an employer's requirements do not determine deductibility, they are not irrelevant. The fact that an employee incurs an expense on a voluntary basis (that is, not at the direction of their employer) does not necessarily preclude a deduction under section 8-1. 33. The encouragement of an employer will not make expenses of self-education deductible if they are not incurred in the course of producing assessable income but, rather, are associated with obtaining new qualifications to commence a new income-earning activity. Example 7. 35. The directions of an employer do not determine the question of deductibility, they may have relevance for determining the proper scope of an employee's duties and income-earning activities. This may assist in determining whether a voluntary expenditure was incurred in the course of producing assessable income. 41. Even if an expense meets the positive test, a deduction cannot be claimed if it fails one of the negative tests. The negative tests are whether an expense is: • capital or capital in nature • a private or domestic expense • incurred in gaining or producing exempt income. | Detailed Reasoning - Private or domestic expenditure: Paragraph 46 explains that even if the positive test of section 8-1 is satisfied, employees cannot claim deductions for outgoings that are private or domestic in nature. Paragraphs 47 and 48 further explains that characterisation of an expense as private typically supports a conclusion that the expense does not have a sufficiently close connection to the earning of assessable income by the employee. Expenses that are typically of a private nature may be deductible when there is a sufficiently close and real connection to the employment activities that produce assessable income for the employee. TR 2024/3 Income tax: deductibility of self-education expenses incurred by an individual sets out the principles on the deductibility of self-education expenses under section 8-1 of the ITAA 1997. The following paragraphs discuss these principles in detail: 14. It is well established that the words 'in gaining or producing assessable income' are to be understood to mean 'in the course of' gaining or producing assessable income and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income. 15. This means there must be a relationship, or close connection, between the expenditure and what it is that you do to produce your assessable income, or if none is produced, would be expected to produce your assessable income. 16. It is not enough to show only that there is some perceived connection, general link or causal connection between the expenditure and the production of your income. The expenditure must have a close connection to the performance of the duties and activities through which you earn your income. 17. The question of what produces your assessable income should not be approached narrowly. It requires consideration of the tasks to be performed and the duties to be observed (referred to as your income-earning activities). Principle 1: Income-earning activities based on skill or specific knowledge are detailed in the following paragraphs. 26. Where your income-earning activities are based on the exercise of a skill or having specific knowledge, self-education expenses incurred to maintain or improve that knowledge or your ability to exercise those skills are deductible. 27. Whether the self-education enables you to maintain or improve a skill or specific knowledge is a question of fact to be determined by all the facts and circumstances of your particular case. 28. Courts and tribunals have found the following when considering whether self-education expenses were incurred to maintain or improve knowledge or skills: If the self-education is too general in terms of your current income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist. This is often the outcome for the cost of self-improvement or personal development courses because the knowledge and skills obtained is too general. Expenditure on an overseas study tour or trip has been found to be deductible in limited circumstances where the study tour or trip had the requisite connection to the income-earning activities at the time. Notable factors to demonstrate such a connection are • devoting all of your time while overseas to the advancement of your knowledge relevant to your work • the tour or trip is undertaken while you are employed in the relevant role • the tour or trip was not recreational or general in nature, but rather showed a particular special circumstance to differentiate it from mere recreational satisfaction • the tour or trip was requested or supported by your employer. | Detailed Reasoning - Conclusion: In your case, when determining the reasons for our decision we considered details in Taxation Ruling IT 2198. We found there is not a positive connection between your overseas trip and the performance of your duties. You stated that, specific knowledge of various conflicts and battles is key to the strategic and tactical prowess of an Army Officer. By touring the battlefields, I have been able to improve my knowledge. As per IT 2198, the claims have been based on a general proposition that the overseas travel has made you better to be able to carry out your duties, not specific to carrying out your duties. This is not sufficient to enable the expenditure to be allowed as a deduction. We found similarities in your case, with Case R47 84 ATC 380; (1984) 27 CTBR (NS) Case 101 and Case Q83 83 ATC 418; (1983) 27 CTBR (NS) Case 11. You stated that yes, your employer encourages you to undertake the travel. You further stated, every Commander I have served under, both direct supervisors and senior officers who are more than 2-up on the chain of command, has stated that while learning about a battle from books provides a basic understanding of what occurred, however being able to walk the ground of the battle provides a much higher understanding of what those in the battle were facing, what they could see and what options they had. TR 2020/1 discusses the relevance of employer requirements. Whether your employer requires you to undertake the travel or not, does not determine the deductibility. Although, in the case of the Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60; (1961) 12 ATD 348; (1961) 8 AITR 406 (Finn's case), this was considered in determining the relevant connection to their income producing activities being established and the deductions being allowable. In your case, it appears it was not a direct requirement from your employer to build your skills and knowledge in your employment duties, but a suggestion to experience the battle locations firsthand. Principle 2 is the deductibility of self-education expenses under section 8-1 that leads to, or is likely to lead to, an increase in your income. You stated that gaining a more in-depth understanding of various battles allows me to speak with a greater authority during Formal Professional Military Education (PME). This is important as the Chief of Army Directive 11/24 Army's Professional Military Education (PME) Plan 20XX-20XX states that PME is to be assessed by supervisors as part of the annual Performance Appraisal Reporting (PAR) process. If I perform well during the PME activities, I will be assessed higher, which increases both my chance at promotion as well as posting into higher profile roles, which also increase the chance of promotion. Paragraph 42 of TR 2024/3 states the self-education expenses are deductible if the expense for self-education objectively leads to or likely leads to an increase in your income from your current income-earning activities. We are not satisfied that your travel overseas meets the conditions identified by the courts and tribunals as detailed in paragraph 44 that would directly lead to, or likely lead to, an increase in your income. We considered your provided document detailing your employment duties and TR 2024/3, in particular paragraph 28. Your travel overseas is considered too general in terms of your income-earning activities, therefore the connection between your overseas travel expenses and your income-earning activities does not exist. We acknowledge the fact that the travel undertaken would enable you to have greater firsthand knowledge of wars and battle fields which may be useful in your current position with the Australian Army. However, this does not in itself mean that the expenditure was incurred in gaining or producing assessable income. The circumstances of your travel are similar to travel undertaken in the Taxation Boards of Review cases noted above. Your trip is seen to be predominantly private in nature and has a general connection to your income- earning activities. In conclusion, no deduction can be claimed for the travel expenses for the trip overseas as there is insufficient connection between the outgoing incurred and the gaining of your assessable income. Therefore, a deduction for the travel expenses is not available under section 8-1 of the ITAA 1997.