Private ruling: Self education expenses
Date of advice: 14 December 2015
Published: February 2016
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

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


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 states that you can deduct from your assessable income any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income, except where the loss or outgoing is of a capital, private or domestic nature. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses 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). TR 98/9 also states that 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 case you are studying a course. It is accepted that this course will maintain and enhance the skills that are required in the performance of your current employment activities. As there is the necessary connection between the course, your current and previous income-earning activities, you are entitled to claim a deduction for your course expenses under section 8-1 of the ITAA 1997. Refer to TR 98/9 for types of deductible self-education expenses connected to both employment positions.

Relevant facts: You were employed as a Project Manager with a university. | You commenced a course of study with that university. | Since commencing, your duties included strategic planning for growth business, improving budgets and projections, increased responsibility in people management, and a key role in the formation of a specialist registries group. | Part way through the course of study, due to a delay in receiving funds for a particular project, you took employment with another employer, with the intention of returning once funding was resumed. This was done with the support of your current employer. | Your duties with the temporary employer included budget projections, managing and supervising staff, writing proposals to tenders and evaluating projects. | Your course studies during this time included HR modelling, strategies, negotiation, accounting, and corporate finance and leadership skills.