Private ruling: Self education expenses
Date of advice: 15 December 2016
Published: May 2017
Ruling period: Year ended 30 June 20ZZ | Year ended 30 June 20YY | Year ended 30 June 20XX | Year ended 30 June 20WW
Date scheme commenced: 1 July 20VV

Ruling: Q1: Are you entitled to deduct self-education expenses? | A1: No

Relevant facts and circumstances: You have been a specialist nurse for a number of years. You have determined that you wish to become a doctor. You commenced medical studies in 20VV. You have paid course fees to undertake the course. You believe that you will be conducting similar or more advanced activities once you become a doctor.

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 all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature. 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. Self-education expenses are deductible where they have a relevant connection to the taxpayer's current income earning activities. However, no deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayers current employment. Such expenses of self-education are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income ( FC of T v. Maddalena (1971) 45 ALJR 426; (1971) 2 ATR 541; 71 ATC 4161). Several court cases have established general guidelines in determining the deductibility of self-education claims. The decision in FCT v. Maddalena (1971) 2 ATR 541; (1971) 45 ALJR 426; 71 ATC 4161, supports our view that no deduction is allowable for self-education expenses if the study, viewed objectively, is designed to enable a taxpayer to get employment or to obtain new employment. Such expenses would come at a point too soon to be properly regarded as incurred in gaining assessable income. Your circumstances You are employed as a specialist nurse. Your duties whilst working closely with specialist medical practitioners include providing care for patients undergoing various surgeries and post-operative management. You do not make the ultimate decisions about the treatment of the patient. While we acknowledge that the knowledge and skills gained from the course could be of some assistance in your current position, this course is designed to enable you to obtain employment in a new role rather than assist you in performing your current duties. Therefore you are unable to claim a deduction for the expenses incurred relating to the course, as they are considered to be incurred at a point too soon.