Private ruling: Self Education
Date of advice: 10 May 2017
Published: September 2017
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ended 30 June 2021 | Year ended 30 June 2022
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for self-education expenses incurred in relation to your Master of Business Administration (Change)(MBA)course. | A1: Yes

Relevant facts and circumstances: Your current position is Course Manager. You are intending to improve your skills by completing a Masters Business Administration - Change course. Your current employment description includes a number of responsibilities relating to your MBA's listed course subjects. Your current employer has stated that they believe completing the course will likely improve your skills in your current position. Your employer has agreed to provide you with paid study leave.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1936 section 82A

Reasons for decision: Summary: The self-education expenses, including course fees, incurred in undertaking this program have the necessary and relevant connection with the earning of your assessable income and are deductable under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). | Detailed Reasoning - Detailed reasoning: Section 8-1 of the 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 (TR 98/9) provides the Commissioner's view for the circumstances under which self-education expenses are allowable as a deduction. TR 98/9 provides that 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). 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. | Detailed Reasoning - Application to your circumstances: You will be undertaking a course in Master of Business Administration. In your case, there is sufficient connection between the courses you will be completing and your income producing activities at the time as stated by your employer. Consequently, the self-education expenses, including course fees, incurred in undertaking this course that have the necessary and relevant connection with the earning of your assessable income and are deductable under section 8-1 of the ITAA 1997. | Detailed Reasoning - Additional information: In certain circumstances you may have to reduce your allowable self-education expenses by $250. However you may have other types of expenses some of which are not allowable as a deduction that can be offset against the $250 before you reduce the amount you can claim for allowable expenses. For more information on how to work out your self-education expenses, search for Quick Code (QC) 31970 at ato.gov.a