Private ruling: Self-education expenses
Published: October 2014
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for your self-education expenses? | A1: Yes. | Q2: Are you entitled to a deduction for your accommodation, travel and meal expenses whilst undertaking your course? | A2: Yes. | Q3: Are you entitled to a deduction for your mentor's accommodation, travel and meal expenses whilst undertaking your course? | A3: Yes.

Relevant facts and circumstances: You are an employee. You are obtaining a post graduate qualification which will enable you to continue doing the same work however you will be able to expand your client base. You expect that the course will enable you to increase your income. You live in City A while the course is in City B. You will incur expenses for flights, accommodation, meals and text books. Additionally, you paid for the flights, meals and accommodation of two of your colleagues so that they could be trained to be mentors so they could help and oversee your work. You will be flying back and forth from City A to City B on a weekly basis until the completion of the course and therefore, will not establish a new home in City B. You have applied for FEE-HELP.

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, relate to the earning of exempt income or a provision of the ITAA 1997 prevents it. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business 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 will enhance the skills and knowledge that are required in the performance of your current employment duties and is likely to result in a pay increase in the future. Consequently, the self-education expenses incurred in undertaking this degree have the necessary and relevant connection with the earning of your assessable income. The cost of your course fees, text books, accommodation, meals and travel, as well as the expenses for your mentors, are therefore deductible as self-education expenses under section 8-1 of the ITAA 1997.