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Edited version of your written advice
Authorisation Number: 1012723600924
Ruling
Subject: Self-education expenses
Question
Are you entitled to a deduction for self-education expenses for a Bachelor Degree (the course), where the expenses were incurred after you commence working in a specialist position?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2014
The scheme commences on:
1 July 2013
Relevant facts and circumstances
You have been employed by a bank for a number of years.
You commenced the course in 20XX-XX financial year, as it is a topic that interests you.
The course was not a requirement of your position at the time you commenced the course.
For a number of years you were employed in a position unrelated to the self-education topic.
You commenced in a new role in the 20XX-XX financial year.
A job requirement of the new position was a degree in a particular field.
The course satisfied the job requirement for your current position, and maintains or enhances the skills that are required in the performance of your employment duties.
The course was financed using a FEE-HELP loan.
You have registered for a Commonwealth Supported Place (CSP) in the 20XX-XX financial year. A CSP is a place in a course where part of the cost of your studies is covered by the Australian government through HECS-HELP.
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 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, 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).
In your case, it is accepted that the course maintained or enhanced the skills that were required in the performance of your employment duties in the specialist position. Consequently the self-education expenses incurred from the commencement date of this position 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.
Please note
Where self-education expenses are incurred through a CSP, and part of the cost of the course is covered by the Australian government through HECS-HELP, TR 98/9 explains at paragraph 24 that HECS fees payable are not an allowable deduction under section 8-1 of the ITAA 1997.
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