Private ruling: Self-education expenses
Date of advice: 8 February 2017
Published: July 2017
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to claim a deduction for self-education expenses? | A1: Yes

Relevant facts and circumstances: You are employed in a particular field. You have a Bachelor's degree You are planning to undertake a relevant Master's Degree. The expected commencement date for study is ddmmyy and the mode of study will be part-time. There are a number of course subjects. Your local tertiary institution does not offer this course of study. The projected self-education expenses to be claimed are listed below; ● Accommodation and meals (for units that require residential participation or block mode study) ● Computer consumables ● Course fees ● Decline in value for depreciating assets (costs exceed $300) ● Airfares(for units that require residential participation or block mode study) ● Home office running costs ● Internet usage (excluding connection fees) You intend to pay for the course fees directly from your savings. However you will attempt to apply for financial support from your employer to pay for the course fees, by submitting an application for recognition and or support for work related study. You are currently not receiving an allowance or reimbursement from your employer to pay for the course fees. Your employer provides recognition and support in accordance your current enterprise agreement. Employees are encouraged to apply for recognition and financial support; however this is subject to approval. If your application for recognition and support for study is successful, you may be eligible to receive paid study leave (up to 4 weeks) and also financial support on a unit and semester basis, which is again subject to approval. You intend to study outside of work hours (i.e. in your own time). However if you are successful in your application for recognition and support, your employer may provide up to 4 weeks paid study leave. The provision of study leave will enable you to choose block mode study for a limited selection of units within the degree. In these block mode cases, you would be studying in work approved time i.e. study leave time. Study leave may be provided by your employer should you be successful in your application for recognition and support for this proposed study. You have been advised by the University that block mode study is usually 2 to 3 day blocks spread out during the semester to allow post graduate students to return to work.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: 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 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 ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). The following types of expenses are generally allowable deductions: ● Course fees ● Text books and stationary, including computer consumables ● Accommodation and meals when required to be away over night ● Airfares when required to attend educational institutions ● Decline in value for depreciating assets (costs exceed $300) ● Running costs for a home study, including internet usage (excluding connection fees) In your case, it is accepted that the course you will undertake will enhance the skills and knowledge that are required in the performance of your current employment duties. Consequently, the self-education expenses incurred in undertaking this course have the necessary and relevant connection with the earning of your assessable income and are deductible under section 8-1 of the Income Tax Assessment Act 1997 .