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Edited version of private ruling
Authorisation Number: 1011579971873
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Ruling
Subject: Self education
Are you entitled to a deduction for self education expenses?
No.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You are employed part time.
You are undertaking a double degree.
You started the course in 2009.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
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 circumstances in which self education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the self education enables the taxpayer to maintain or improve that skill or knowledge, the self education expenses are allowable as a deduction.
The decision in FC of T v. Maddalena 71 ATC 4161; (1971) 2 ATR 541 also supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged.
You work part time in a specified area. Although you may gain some knowledge and skills from the subjects studied that could be of some assistance in your work, the predominant focus of the courses is to provide the skills to become a fully qualified professional.
It is considered, that there is an insufficient connection between the skills and knowledge required in your duties and the course that you have undertaken.
As there is an insufficient nexus between the course of self education and your income earning activities, the self education expenses associated with the course are not incurred in earning your assessable income. Consequently, you are not entitled to a deduction for the expenses under section 8-1 of the ITAA 1997.
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