Edited version of private ruling

Authorisation Number: 1011800135385

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Ruling

Subject: Self education expenses

Question and answer:

Are you entitled to claim a deduction for self-education expenses incurred in relation to a law course?

Yes.

This ruling applies for the following period:

Year ended 30 June 2011

Relevant facts and circumstances

You are employed as a project officer.

You are currently on maternity leave and are scheduled to return in the near future.

You are currently enrolled in a course of study relevant to your position.

You do not receive any financial assistance from your employer in relation to the course.

You have previously applied for and received study leave (weekly and SWATVAC) but you do not have study leave at present.

Your studies are undertaken during your own time.

Your employment duties as a project officer include:

· Provide support on specific projects and action items.

· Assist in the identification, development and evaluation of national strategies to promote the achievement of the organisation.

· Provide feedback on operations, legislation, or other issues affecting the work place.

· Liaise regularly with members of the team as well as across the organisation to achieve business objectives and ensure the overall high-quality performance of your team.

· Have a strong performance management ethos, taking responsibility for the development and completion of performance agreements as well as learning plans for themselves.

· Provide personal and administrative support to the team.

· Providing support to senior management as well as helping meet team objectives.

· Undertaking research and analysis as well as preparing reports, briefings, plus research and discussion papers for senior officers, including coordinating complex administrative processes.

· Preparing complex written material in various formats for a range of audiences.

· Ensuring consistency in language and information provided to the organisation's executive.

· Possessing excellent time management capabilities and working to extremely tight and inflexible deadlines.

· Helping review policy, procedures and guidelines as well as providing recommendations for change to achieve business plus broader outcomes.

· Liaising as well as negotiating with a wide range of internal and external stakeholders and clients.

· Preparing and presenting information to a wide range of audiences.

· Building and maintaining effective networks and relationships.

· Applying Organisation policy and legislation, including the principles of workplace relations, employment equity and diversity, occupational health and safety, access and equity as well as privacy in work practices and when dealing with clients.

You also believe that undertaking your course has been beneficial as you have been able to complete research for projects requiring law interpretation.

You feel that your studies are directly connected to your work and that you are required to provide feedback on and interpretation of legislation when you undertake project work.

You would like to claim a deduction for your tuition fees and text books.

You had favourable private rulings completed for previous periods. You have changed positions with your employer since the most recent ruling was issued.

Your fees for the course are being met by participation in the FEES-HELP scheme; this has been the case for the duration of the course and is also the case for the current year.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Summary

You are entitled to claim a deduction for self education expenses.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent 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 (Federal Commissioner of Taxation v, Finn (1961) 106 CLR 60; (1961) 12 ATD 348; (1961) 8 AITR 406).

Similarly, if the study of a subject of self education objectively leads to, or is likely to lead to an increase in taxpayer's income from his or her current income earning activities in the future, a deduction is allowable.

In your case, you are employed as a project officer. Aspects of your work involve application and interpretation of the law. The law course has a direct nexus to your income earning activities; your studies will enhance your existing knowledge and assist you in the performance of your day to day duties.

Therefore, the expenditure is incurred in gaining or producing assessable income and is an allowable deduction.

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