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Edited version of private ruling
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Ruling
Subject: Self-education expenses
Are you entitled to claim a deduction for self education expenses?
No.
This ruling applies for the following periods:
Year ended 30 June 2010
Year ended 30 June 2009
The scheme commenced on:
1 July 2008
Relevant facts and circumstances
You work in the childcare industry, not as a teacher.
You commenced a diploma in early childhood teaching.
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 discusses circumstances in which self-education expenses are allowable as a deduction. If your current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables you to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.
If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in your income from your current income-earning activities in the future, the self-education expenses are allowable deduction.
Paragraph 15 of TR 98/9 also mentions that no deduction is allowable for self-education expenses if the study is to enable you to obtain employment, to obtain new employment or to open up a new income-earning activity (whether in business or in your current employment). This includes studies relating to a particular profession, occupation or field of employment in which you are not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.
Your study is to enable you to open up a new income earning activity. Teaching is a profession in which you are not yet engaged and your employment (and income earning activity) is as a childcare worker.
In your case your study has occurred at a point too soon for a deduction to be allowed.
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