Private ruling: Deduction for self education expenses
Published: July 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 01 July 2012

Ruling: Q1: Are you entitled to a deduction for the university fees and self education expenses incurred in undertaking a course of study? | A1: Yes

Relevant facts and circumstances: You are employed in a professional field. You are undertaking study to complete a course from a University. You have completed part of the course and are to complete your study by the end of the year. You have demonstrated that your studies enhance your ability to perform your role by giving you an advanced knowledge and skills to use. You have incurred a FEE-HELP debt as a student and also costs for text books and home study expenses. Your employer has not subsidised you for any of these expenses.

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 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. 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. In your case, it is accepted that the course of study you are undertaking will enhance the skills required in the performance of your duties. Consequently, the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income. Therefore, you are entitled to a deduction for your self-education expenses under section 8-1 of the ITAA 1997.