Private ruling: Self-education expenses
Date of advice: 19 January 2024
Published: 26 February 2024
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for work related self-education expenses for your course? | A1: No.

Relevant facts and circumstances: You are employed on a continuing basis. You have studied a course since 20XX. You are eligible for a staff discount on X amount of your course fees. The remaining amount of your fees are deferred. In the 20XX income year, you incurred fees for your course of $XXXX in XX/20XX and $XXXX in XX/20XX. On XX/XX/20XX, you were promoted within your workplace. You state that your position duties include: • Designing and conducting audits to ensure that students are compliant with relevant legislation • Interpreting university policy • Ensuring that junior staff are trained and assisted correctly • Advising students and colleagues on student visa conditions and how they apply to a student's study and work responsibilities • Managing complex cases and appeals. You do not consider your position to involve traditional legal work.

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 (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 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. 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). Similarly, 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 their current income earning activities in the future, a deduction is allowable. 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 taxpayer's 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 ( Federal Commissioner of Taxation v. Maddalena (1971) 45 ALJR 426; (1971) 2 ATR 541; 71 ATC 4161 and paragraphs 15, and 48-62 of TR 98/9). In your case, you are studying a course. The course description you have provided outlines that this course is an academic requirement for admission to legal practice. Therefore, the purpose of the course is to open up a new discrete income earning activity and comes at a point too soon to be deductible under section 8-1 of the ITAA 1997. Furthermore, the connection between your course and your employment position is too remote to provide the required connection between the study and your current income-earning activities. Accordingly, you are not entitled to a deduction for the expenses you incur in respect of the study.