| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012719418321
Ruling
Subject: Self-education expenses
Question
Are you entitled to a deduction for your self-education expenses?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commences on
1 July 2013
Relevant facts and circumstances
You own a rental property.
You incurred expenses to enrol in a number of wealth creation programs.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Reasons for decision
You can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income except where the loss or outgoing is private in nature (section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)).
Expenditure on self-education is deductible under section 8-1 of the ITAA 1997 where the expenditure has a relevant connection to your current income-earning activities. The expenditure must be incidental and relevant in the sense of having the essential character of expenditure incurred in the course of gaining or producing assessable income. There must be a sufficient connection between the expense and the operations or activities which gain or produce your assessable income.
Taxation Ruling TR 98/9 sets out the circumstances in which self-education expenses are allowable as deductions, and states that self-education expenses are deductible under section 8-1 of the ITAA 1997 where they have a relevant connection to the taxpayer's current income-earning activities. No deduction is allowable if the course of study is too general in terms of the taxpayer's income earning activities and there is not a sufficient nexus between the course of study and the income earning activity.
In addition, 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. This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses come at a point in time too soon to be regarded as being incurred in gaining or producing assessable income. They are incurred in getting, not in doing, the work which produces the income.
In your case you incurred expenditure to enrol in a number of wealth maximisation programs. Wealth maximisation programs are too general in terms of deriving rental income from a rental property, and as such the expenditure you have incurred on the programs does not have a sufficient connection with your income producing activities. The expenditure is also incurred at a point too soon to be incidental and relevant to income you may derive from any future investment properties.
The expenditure you incurred does not have the essential character of expenditure incurred in gaining or producing your assessable income. Accordingly, you are not entitled to a deduction under section 8-1 of the ITAA 1997 for the self-education expenses incurred.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
