Edited version of private advice

Authorisation Number: 1052158716144

Date of advice: 21 August 2023

Ruling

Subject: Work-related self-education expenses

Question

Are you entitled to a deduction for self-education expenses incurred in association with completing a Master of Laws under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

Yes.

Your self-education expenses are deductible, the study meets the requirements detailed in Taxation Ruling TR 98/9. In addition, where a loan is obtained for all or part of the fees for the course under FEE-HELP, this does not preclude you from claiming a deduction for the expenses incurred in relation to the course. Further information about self-education expenses can be found by searching 'QC 72166' on ato.gov.au

This ruling applies for the following period:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

XX April 20XX

Relevant facts and circumstances

You are currently undertaking a Master of Laws at University.

The course consists of six units of study in total. You have incurred the expense for four of the six units, which are:

•         Health Care and Professional Liability

•         Project Finance Fundamentals

•         Class Action Litigation in Australia and

•         Advanced Directors Duties

You have paid or will pay for the units you've completed via the Higher Education Loan Program (HELP). You have not indicated your tuition fees are Commonwealth supported or paid with the assistance of a HECS-HELP loan.

You commenced the course in April 20XX and will complete all six units by 20XX.

Since commencing the course you have been employed as an Associate at two law firms.

You were employed at Law Firm 1 from XX April 20XX to XX September 20XX.

The areas of law you specialised in included commercial and corporate litigation.

Your duties included:

•         Managing claims.

•         Drafting legal advice.

•         Briefing Counsel and experts.

•         Appearing at directions hearings.

•         Interviewing witnesses and drafting their affidavits.

•         Negotiating with adverse parties to resolve various issues.

•         Supervising work.

•         Proactively contributing to business development publications.

From XX September 20XX to present you became a full-time employee of Law Firm 2. The areas of law you specialise in include commercial and corporate litigation.

Your duties include:

•                     Managing and progressing workstreams.

•                     Drafting pleadings and other court documents.

•                     Assisting with Counsel engagement including by drafting observations.

•                     Assisting in preparing expert evidence.

•                     Assisting in preparing lay evidence.

•                     Managing document review.

•                     Drafting other ad-hoc matter related documents.

•                     Supervising junior lawyers in relation to work incidental to all the above.

•                     Contributing to business development publications and activities.

Your current position as Associate at Law Firm 2 is centred around commercial and corporate litigation.

The study you have completed has relevance to the duties of your current and previous role.

You are completing the course to improve the specific knowledge you require in your employment activities (both previous and present). You are also hopeful that on completion of your study you will receive an increase in income in the form of a promotion to Senior Associate.

The self-education deduction should be claimed in the financial year that it is incurred. You incur deductible course or tuition fees when the debt becomes a legal obligation you need to pay back (for example, on the census date). This is not when you make a repayment.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1