ATO Interpretative Decision
ATO ID 2002/463
Income Tax
Self-education expenses - Post Graduate Education Loans schemeFOI 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the taxpayer allowed a deduction for Postgraduate Education Loans Scheme repayments under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. Paragraph 26-20(1)(c) of the ITAA 1997 specifically denies a deduction for Postgraduate Education Loans Scheme repayments.
Facts
The taxpayer is enrolled in a Postgraduate course at an Australian University.
The taxpayer has received assistance under the terms of the Postgraduate Education Loans Scheme and has made several repayments of the loan.
The course of study undertaken by the taxpayer will improve the taxpayer's skills and knowledge in their current field of employment and may lead to a future pay increase.
The taxpayer's Postgraduate course has a clear connection to the taxpayer's current income-earning activities. The taxpayer's general education expenses associated with the course (student fees, books, computers, etc) are allowable deductions.
Reasons for Decision
Subsection 8-1(1) of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable. However, paragraph 8-1(2)(d) specifically prevents you from claiming a loss or outgoing where a provision of the ITAA 1997 prevents you from deducting it.
Section 26-20 denies deductions for certain HECS and student assistance payments.
Paragraph 26-20(1)(c) specifically denies a deduction for payments made to reduce a debt to the Commonwealth under Chapter 5A of the Higher Education Funding Act 1988 (HEFA 1988). Chapter 5A of the HEFA 1988 governs the repayments of loans made under the:
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- Higher Education Contribution Scheme (Chapter 4 of the HEFA 1988)
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- Post-graduate Education Loan Scheme (Chapter 4A of the HEFA 1988), and
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- Open Learning Deferred Payment Scheme (Chapter 5 of the HEFA 1988).
The taxpayer has made repayments of their Post-graduate Education Loan. Paragraph 26-20(1)(c) of the ITAA 1997 operates to deny the taxpayer a deduction for the loan repayments. Therefore the taxpayer cannot claim a deduction in respect of the loan repayments under section 8-1 of the ITAA 1997.
Rulings and Determinations
Taxation Ruling TR 98/9
Date of decision: 1 March 2002
Legislative References:
Income Tax Assessment Act 1997
section 8-1
subsection 8-1(1)
paragraph 8-1(2)(d)
section 26-20
paragraph 26-20(1)(c)
Chapter 4
Chapter 4A
Chapter 5
Chapter 5A
Keywords
Self education expenses
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 1 March 2002 | Original statement |
| 1 May 2015 | Archived |