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Edited version of private ruling
Authorisation Number: 1011829084638
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Ruling
Subject: Self education
Question
Are you entitled to a deduction for self education expenses?
Answer: Yes.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
Your employer requested you undergo university studies. These studies assist you in your current duties and will also allow you to expand on your duties.
You were employed fulltime but went part-time to accommodate your course.
You will go back to fulltime work once you complete your course.
Your employer agreed to pay your university fees and you pay all other costs.
Your employer approached you to undertake the course so you could use the skills learnt from the course and also remain with them for a certain period after you complete the course.
Your employer has structured your employment so you can attend theory and practical lessons.
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.
Taxation Ruling TR 98/9 discusses the circumstances in which self education expenses are allowable as a deduction including where a taxpayer's current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self education enables the taxpayer to maintain or improve that skill or knowledge.
In your case, your employer has requested you to undergo a course and you use the skills acquired to assist you in your current employment. They have paid for your course fees and have structured your employment so you can attend theory and practical lessons.
It is accepted that this course you are undertaking will maintain or enhance the skills and knowledge that are required to perform in your current employment duties.
Consequently, the self education expenses you have incurred have the necessary and relevant connection with the earning of your assessable income and are therefore an allowable deduction.
You are entitled to deductions for your books and uniform. The costs associated with obtaining a police check and medical examination are either private or capital in nature and accordingly not deductible under section 8-1 of the ITAA 1997.
You are entitled to a deduction for your travel in either direction between:
· your home and your place of education and
· your workplace and place of education.
Only the first leg of the trip is deductible if you went from home to your place of education and then to work, or the other way round.
Further information
The self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936.
An explanation of how this provision operates in relation to working out your self education expenses is provided at paragraphs 119 to 155 of TR 98/9, which can be accessed on our website www.ato.gov.au or pages 37 and 38 of TaxPack 2010.
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