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Edited version of private ruling
Authorisation Number: 1011626805039
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
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Ruling
1. Are you entitled to a deduction for the tuition fees you incurred from when you commenced employment?
Yes.
2. Are you entitled to a deduction for payments to reduce your full-fee higher education loan program (FEE-HELP) debt?
No.
This ruling applies for the following period
Year ended 30 June 2009
Year ended 30 June 2010
The scheme commenced on
1 July 2008
Relevant facts
You commenced your course in 2008 and completed it in 2009.
You incurred tuition fees in relation to the course.
You obtained employment in early 2009 in the same field.
You have a FEE-HELP debt from your university course.
You are making payments to reduce your FEE-HELP debt.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Income Tax Assessment Act 1997 Paragraph 26-20(1)(cb)
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.
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.
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.
In your case, it is accepted that the course undertaken will maintain or enhance the skills that are required in the performance of your employment duties. Consequently, the self education expenses incurred in undertaking the course have the necessary and relevant connection with the earning of your assessable income and are therefore deductible under section 8-1 of the ITAA 1997.
However, you may only claim the expenses you incurred from when you commenced your employment in early 2009.The expenses should be claimed in the 2008-09 and 2009-10 income years when the study was undertaken.
You are still entitled to a deduction under section 8-1 of the ITAA 1997 for tuition fees paid for the course, even though you obtained a loan for your fees under FEE-HELP.
However, paragraph 26-20(1)(cb) of the ITAA 1997 specifically prevents a deduction for payments made to reduce a debt to FEE-HELP loans. In your case, you are making repayments to reduce your FEE-HELP debt. You cannot claim a deduction for the repayments.
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