Private ruling: Self education expenses
Published: August 2011
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2009

Ruling: Q1: Are you entitled to a deduction for self education expenses? | A1: No.


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 discusses circumstances in which self education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the self education enables the taxpayer to maintain or improve that skill or knowledge, the self education expenses are allowable as a deduction. The decision in FC of T v. Maddalena 71 ATC 4161; 2 ATR 541 also supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. You work as a sales analyst/co-coordinator. Although you may gain some knowledge and skills from the subjects studied that could be of some assistance in your work it is not considered that a sufficient nexus exists between the course and your current income earning activity. The predominant focus of the course is for those in business or having a strong management role. While we accept that you have worked in the management field before coming to Australia, you cannot gain employment in the management field in Australia without a formal qualification. This supports the argument that the study is designed to open up a new income earning activity, that is, that of a manager. Consequently you are not entitled to a deduction for the expenses under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are: | · the application for private ruling dated XX July 20XX; | · emails sent on XX and XX July 20XX containing a list of modules being studied, your current duty statement and your resume. | You are employed as a sales analyst/co-coordinator. | Prior to coming to Australia, you worked in Brand Management and Sales Management roles. However you have not been able to successfully secure employment in these roles in Australia due to the lack of formal tertiary qualification in Marketing or Business. | You are undertaking a Masters of Marketing degree.