Private ruling: Self education
Published: October 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for the cost of an examination? | A1: No.


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 allows a deduction for losses and outgoings which are incurred in the course of gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature. While the following cases involve solicitors, the principles are applicable in your situation. In Case J30 77 ATC 282; 21 CTBR (NS) Case 52 , a law clerk claimed a deduction for admission fees to practise as a solicitor. After admission he continued in the same employment performing the same duties on increased salary. It was considered that the expense was not incurred in doing work as a law clerk but in obtaining work as a solicitor and this would be so notwithstanding that it was with the same employer. The claim was disallowed. The applicant in Case Z1 92 ATC 101; AAT Case 7541 (1992) 22 ATR 3549 claimed a deduction for expenses that led to her admission as a solicitor. The Tribunal held the admission fees were of a capital nature and were, therefore, not an allowable deduction. The admission expenses secured the applicant a 'lasting advantage'. The exam you undertook was a means of having your existing overseas qualifications recognised in Australia. As such, the cost is not incurred in educating yourself. Rather, it was incurred to become qualified. Such expenses provide you with a lasting benefit and are considered to be capital in nature. A deduction is therefore not allowable.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You have an overseas qualification. | You are currently working in a specific position as your qualification is not recognised in Australia. | You cannot progress in your company without being qualified. | You undertook an examination which would result in qualifying as a professional.