Edited version of private ruling

Authorisation Number: 1011537300092

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Ruling

Subject: Self-education deductions

Questions and answers:

Are you entitled to a deduction for course fees, airfares and other travel expenses you will incur in undertaking courses in country A?

Yes.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commenced on:

1 July 2011

Relevant facts and circumstances

You are employed in an occupation.

You are a self taught and at times find yourself under skilled to complete tasks you are given.

You are going to country A for the primary purpose of undertaking courses which relate to your occupation.

You provided details of the courses you are undertaking.

Your director and line manager have encouraged you to undertake the courses and have allowed you unpaid study leave to attend the courses.

You have decided to undertake the courses overseas as the cost of travel and course fees in country A are much less than the cost of undertaking the courses in Australia.

The completion of the courses will provide you with skills and knowledge to be able to perform better in your current role.

You have stated that you are not travelling back on the weekend after your course finishes as the tickets are twice the price of a weekday ticket, you will fly back on the first weekday after the courses are completed.

You do not intend to take any time off while you are away for personal purposes and the only reason you are going away is to complete the courses.

Relevant legislative provisions

Section 8-1 of the Income Tax Assessment Act 1997

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 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 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.

Subject to the general tests in section 8-1 of the ITAA 1997 being met, paragraph 23 of TR 98/9 states that the costs of airfares incurred in order to attend an educational institution are deductible. Furthermore, where you are required to be away from home overnight, accommodation and meals expenses incurred are also deductible, unless you have set up a new home in this location.

In your case, it is accepted the courses you will study will maintain or enhance the skills that are required to perform in your current employment duties. Consequently, the self-education expenses incurred in undertaking the courses have the necessary and relevant connection with the earning of your assessable income.

The course fees, airfares and meal and other travel expenses you will incur are therefore deductible under section 8-1 of the ITAA 1997.

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