ATO Interpretative Decision
ATO ID 2002/485
Income Tax
Subscription to Pay TV ChannelFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether the taxpayer, a sales assistant with teaching qualifications, can claim a deduction under section 8-1 Income Tax Assessment Act 1997 (ITAA 1997) for subscription to a pay TV channel providing professional education for teachers.
Decision
No, the taxpayer cannot claim a deduction for the subscription fee to the pay TV channel under section 8-1- of the (ITAA 1997.)
Facts
The taxpayer is employed as a sales assistant. The taxpayer has completed a teaching degree and would like to work as a teacher in the future. In order to keep her skills up to date the taxpayer subscribes to a pay TV channel that provides accredited professional education to teachers.
The taxpayer incurs the following costs: connection fee; general subscription fee for the base product; and additional subscription fee for the education channel.
Reasons For Decision
In order to be deductible under section 8-1 (ITAA 1997) expenditure must have the essential character of an outgoing incurred in gaining assessable income (Lunney v. FCT (1958) 100 CLR 478). There must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income (Ronpibon Tin NL v FCT (1949) 78 CLR 47), and the expenditure must not be capital, private or domestic in nature.
No deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to get employment or to obtain new employment. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (FC of T v. Maddalena 71 ATC 4161; (1971) 2 ATR 541).
The taxpayer in this case is working as a sales assistant. There is not a sufficient nexus between her current income earning activities and the content of the professional education channel programs. Therefore the pay TV connection and subscription fees will be private expenditure for the purposes of paragraph 8-1(2)(b) and the taxpayer cannot claim a deduction for these expenses.
Date of decision: 6 July 1998
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Case References:
Lunney v. FCT
(1958) 100 CLR 478
(1949) 78 CLR 47 FC of T v. Maddalena
71 ATC 4161
Related Public Rulings (including Determinations)
TR 98/9
Keywords
Deductions & expenses
Continuing professional development expenses
Private or domestic expenses
Self education expenses
Work related expenses
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 6 July 1998 | Original statement |
| 4 July 2008 | Archived |