Private ruling: Self-education expenses
Date of advice: 6 December 2016
Published: May 2017
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you entitled to a deduction for expenses to have your overseas qualification recognised in Australia? | A1: No.

Relevant facts and circumstances: You are currently employed as a Lecturer at a University. You are qualified in your field and obtained your qualification overseas. This qualification is not recognised within Australia. In order to become registered within Australia you are required to complete a series of examinations administered by the relevant Council of Australia and the overseas country. You have incurred expenses associated with obtaining an Australian qualification.

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. Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business discusses circumstances in which self-education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income-earning activities are based on the exercise of a skill or some specific knowledge and the self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. In addition, 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. However, the decision of the High Court in Case Z1 92 ATC 101; AAT Case 7541 (1992) 22 ATR 3549 where the applicant claimed a deduction for self-education expenses that led to her admission as a solicitor is similar to your circumstance. 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'. In your case, the exams and study you undertook were a means of having your existing qualifications recognised in Australia. Such expenses provide you with a lasting benefit and are considered to be capital in nature. A deduction is therefore not allowable.