Private ruling: Self-education expenses
Date of advice: 1 March 2016
Published: April 2016
Ruling period: Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you able to claim a deduction for your self-education expenses? | A1: No

Relevant facts and circumstances: You are currently working in a particular field. Your duties include reading documents in relation to residential and commercial properties, such as land tittle, zoning legislations and contracts of sale. You are considering enrolling in a course.

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 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. In your case, you are employed in a particular field. Your duties while working include reading documents in relation to residential and commercial properties, including land title, zoning legislation and sales contracts. These duties are general in nature relative to the specialised study that you plan to undertake. 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.