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Edited version of your written advice

Authorisation Number: 1012724769602

Ruling

Subject: Self-education

Question

Are you entitled to a deduction for 50% of the cost of airfares and the cruise?

Answer

Yes.

This ruling applies for the following period

Year ended 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts

You are a professional.

You undertook a work related conference.

The conference was held as part of a cruise.

You were away a total of 13 days.

The cruise was for seven days.

Sessions were held over 2 full days and the rest were part days with sight-seeing tours over the periods not in sessions.

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 or are necessarily incurred in carrying on a business for the purpose of 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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business 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 you 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, we accept that the seminars you attended have the relevant nexus to producing your assessable income. Therefore, your intention or purpose in incurring the expense may be an element in determining whether the expense is allowable.

TR 98/9 discusses the apportionment of overseas travel expenses where there is a dual purpose for the travel. Paragraphs 65 and 66 provide the following guidance:

In your case, there are two equal purposes of the trip. That is, to undertake the conference and to have a holiday. Therefore, as there is a deductible and a private purpose, you are entitled to a deduction for 50% of the costs of airfares and the cruise.


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