Private ruling: Work related expenses - self- education
Date of advice: 14 September 2018
Published: November 2018
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for self- education expenses for the period you were not employed? | A1: No | Q2: Are you entitled to a deduction for self- education for the period you were employed? | A2: Yes.


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 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 ( 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 his or her current income earning activities in the future, a deduction is allowable. In your case you commenced the post graduate degree course prior to commencing employment. You gained employment in a relevant field a short period into the post graduate degree. It is considered that any expenses incurred prior to commencing employment are not deductible. This is because the expenses did not relate to the current income earning activities at the time and enabled you to gain the employment. However, it is also considered that any expenses incurred after you commenced employment at ‘A’ would enable you to improve your skill and knowledge and as such are allowed as a deduction for self- education expenses as they are related to the post graduate degree once you had commenced employment.

Relevant facts: You completed an undergraduate degree in a particular field of study. | You enrolled in a post graduate degree. | The classes commenced in 2017. You plan to complete the course by 2019. | You are using a FEE-HELP loan for the course as well as a SA-HELP loan. | The FEE-HELP loan was submitted in 2017. | The SA-HELP request was submitted a short time later in 2017. | You commenced employment on a full-time basis at (‘A’) which is involved in the financial services industry after commencing your post graduate degree in 2017. | The subjects undertaken within the course will enable you improve the specific skills or knowledge used in your current employment. The course will allow you to perform additional duties in your existing role. | You are required to undertake the following tasks in your current employment: | • Monitoring global market data which could adversely impact our portfolio positions. | • Building automated processes to ingest, clean and manipulate data from third parties. | • Using statistical methods to suggest actions for our portfolio to adjust exposure to global events. | • Model the individual position contributions to portfolio risk, and ways to effectively reduce these. | • Evaluate the use of derivatives for risk management, hedging or increasing exposure to an idea. | • Modelling the impacts of currency movements on our portfolio. | • Design, build and maintain internal software applications to aid the fundamental research teams’ investment process. | The completion of the post graduate degree program will provide you increased confidence in undertaking more complicated responsibilities as you will have a stronger theoretical understanding of mathematical modelling. This will allow you more easily to and implement new methods from academic literature and make better informed decisions about the trade-offs between different statistical methods.