Private ruling: Self-education
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for self-education? | A1: No.


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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business, sets out the circumstances in which self-education expenses are allowable as a deduction. Generally speaking self-education expenses are deductible where they have a relevant connection with the taxpayer's current income earning activities. If your income-earning activities are based on the exercise of a skill, or some specific knowledge, and the subject of self-education enables you to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction. If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in your income from your current income-earning activities in the future, the self-education expenses are allowable as a deduction. However, a deduction is not allowable for self-education expenses if the study is designed to enable a taxpayer to get employment, to obtain new employment, or to open up a new income-earning activity. The expenses come at a point in time too soon to be regarded as being incurred in gaining or producing assessable income. In your case, you were not employed when you did the study or incurred the expenses. As such, the expense was not incurred from current income-earning activities. Therefore, it is considered that the study you undertook opened up a new income earning activity. Therefore, you are not entitled to a deduction for self-education expenses.

Relevant facts: You commenced studying in 2012 and completed the course in 2013. | You were not employed while you were studying. | Since completing the degree, you have successfully obtained a job using the skills or knowledge gained by doing the course.