Private ruling: Work Related Expenses
Date of advice: 6 May 2016
Published: June 2016
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the expenses that you incurred in completing a Commercial Pilots Licence - Aeroplane to Commercial Pilots Licence - Helicopters conversion course deductible? | A1: Yes.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a pilot. You hold a Commercial Pilot Licence (CPL) - Aeroplanes (A). You have been piloting the Boeing 737s. You will be transferring to piloting fighter jets. You undertook a conversion course for CPL-A to CPL - Helicopters (H). You undertook this course to improve your hand eye coordination skills for the transition to piloting fighter jets. The course provided you with a valuable refresher in low level flying techniques which were not used in flying the Boeing 737. The course provided you with an understanding of the Visual Flight Rules (VFR) which you were unfamiliar. The VFR are a requirement for your new position. You previously only had to act under the Instrument Flights Rules (IFR).

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1936 Section 82A

Reasons for decision: Summary: You are entitled to a deduction for the work related expenses incurred in undertaking the CPL-A to CPL-H course under section 8-1 of the Income Tax Assessment Act 1997. | Detailed Reasoning - Detailed reasoning: 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. In undertaking the CPL-A to CPL-H course there are specific skills and knowledge that you were gaining and maintaining. You state that you were unfamiliar with the VFR before completing the course and you had not used low level flying techniques for a long period. In undertaking this course you obtained knowledge of the VFR which are a requirement for you to perform in your new position. Along with this you maintained your low level flying techniques which are relevant to piloting fighter jets. It is accepted that your CPL-A to CPL-H course that you completed in the relevant tax period enhanced the skills that were required in the performance of your duties as a pilot. Consequently, the work related expenses incurred have the necessary and relevant connection with the earning of your assessable income. You are therefore entitled to a deduction under section 8-1 of the ITAA 1997. You must reduce your claim by any amount that may be reimbursed by your employer.