You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.
Edited version of private advice
Authorisation Number: 1051569710531
Date of advice: 20 August 2019
Subject: Self-education expenses
Are the self-education expenses outlined below an allowable deduction - in whole or in part - under s8-1 of the Income Tax Assessment Act 1997?
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You have been employed in a Level A role for a number of years.
In this role you were required to undertake a number of duties which included:
· Supporting and assisting with research for number of different activities.
· Supporting and assisting with a number of different activities including supervision, moderation and administration.
· Supporting and assisting with a number of programs and activities.
In order to move from a Level A employee to a Level B employee requires you to obtain a doctoral or masters qualification or equivalent accreditation and standing.
The Level B role requires employees to undertake a number of duties additional to the typical duties for Level A staff.
You completed a full-time Master's level degree while employed as lecturer Level A employee.
You paid the course fees via FEE-HELP.
You undertook the qualification with the purposes of:
· Maintaining and improving your skills and knowledge for your current work activities.
· Gaining a promotion from a Level A employee to a Level B employee.
· Meeting the criteria required to qualify to undertake a PhD.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Reasons for decision
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 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.
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 (see Federal Commissioner of Taxation v. Maddalena (1971) 45 ALJR 426; (1971) 2 ATR 541; 71 ATC 4161; and paragraphs 15, & 48-62 of TR 98/9).
In your case, although you may gain or improve your knowledge and skills by undertaking the course that could be of some assistance in your Level A role, it was not a requirement to undertake your duties in that role. It is considered that you undertook the study in order to open up a new income earning activity as a Level B employee as you were unable to become a Level B employee without a Master's level degree.