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Ruling
Subject: Self education expenses
Question
Are you entitled to a deduction for self- education expenses for a course you intend undertaking?
Answer
No
This ruling applies for the following periods:
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
Year ending 30 June 2017
The scheme commences on:
I July 2013
Relevant facts and circumstances
You are employed as an education support officer.
Your have provided a list of current duties.
Your current qualifications allow you to work successfully in your present position.
You plan to undertake part-time study to become a qualified teacher.
You state the course will maintain and improve your skills required in your current work activities and it is likely that your income will increase at the completion of your study.
You intend to remain in your current position while studying.
You have undertaken several in-service courses that are relevant to your intended course.
Your employer is supportive of your studies and allows you to work part-time to attend lectures.
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 or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings 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. Self-education expenses are deductible where they have a relevant connection to the taxpayer's current income earning activities.
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 a taxpayer income from his or her current income earning activities in the future, a deduction is allowable.
However, no deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayers current employment. Such expenses of self-education are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (FC of T v. Maddalena (1971) 45 ALJR 426; (1971) 2 ATR 541; 71 ATC 4161).
In your case, you are employed as an education support officer. You are required to support and assist teachers with the preparation of materials for activities and learning and take students as programmed by the teacher. You also assist in other student group activities.
Even though the subject studied may gain you some knowledge and skills in your current role as an education support officer, when viewed objectively, the predominate focus of the course is to provide the skills to become a fully qualified teacher.
Thus, you are unable to claim self education expenses under section 8-1 of the ITAA 1997 because the expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.
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