Private ruling: Deduction for self education expense
Published: December 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for your university course fees incurred through FEE-HELP? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 26-20

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 explains how this provision applies to self-education expenses and states that: 13. If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. 14. 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, the self-education expenses are allowable as a deduction. In your situation, you state that you are undertaking study that directly related to your income earning activity. Even when you have obtained a loan for all or part of the fees for the course under FEE-HELP, this does not preclude you from claiming a deduction for the expenses incurred in relation to the course. Accordingly, you are entitled to a deduction under section 8-1 of the ITAA 1997 for expenses paid for the course of study to the extent that it is directly related to your current income earning activities, including when you have obtained a loan under the FEE-HELP scheme to pay for part of the course fees.

Relevant facts: You are currently studying at a university where you are a full fee paying student. You have been paying for the courses through up-front payment of the fees and the FEE-HELP system. | Your employment is directly related to your income earning activities.