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Edited version of your written advice
Authorisation Number: 1012879646509
Date of advice: 16 September 2015
Ruling
Subject: self-education expenses
Question
Can you claim self-education expenses for your studies in a bachelor of X?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015.
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You work as an assistant X.
You are not a registered or enrolled X.
You are studying a bachelor of X.
You have incurred expenses in your studies for course fees and travel.
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.
Taxation Ruling TR 95/15 specifically deals with self-education for Xs.
• A deduction is allowable for self-education expenses if the education is directly relevant to the taxpayer's current income-earning activities. This particularly applies if a taxpayer's income-earning activities are based on skill/knowledge and the education enables him or her to maintain or improve that skill/knowledge.
• A deduction is allowable if the education is likely to lead to an increase in the taxpayer's income from his or her current income-earning activities.
• A deduction is not allowable if the education is designed to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity ( FC of T v. Maddalena 71 ATC 4161; 2 ATR 541).
• Self-education includes courses undertaken at an educational institution (whether leading to a formal qualification or not), attendance at work-related conferences or seminars, self-paced learning and study tours.
• Self-education expenses include fees, travel expenses (e.g., attending a conference interstate), transport costs, books and equipment.
A similar case was discussed in ASSEFA v. Commissioner of Taxation [2009] AATA 2 in which an assistant X was disallowed a claim for self-education expenses. It was found that a X assistant is not the same as a registered X or enrolled X.
"Based on the ASCO descriptions, there is a significant difference between the position of Enrolled X and Registered X, on the one hand, and Personal Care Assistant/X Assistant on the other hand. In addition to the requirement of registration or licensing, the Enrolled X and the Registered X have entrusted to them a range of activities that could not be undertaken by the X Assistant. At its simplest level, the Enrolled X and the Registered X are Xs; the X Assistant, or Personal Care Assistant, is not."
The case compared the roles of a X assistant to the roles of an enrolled or registered X using extracts from an Australia Bureau of Statistics publication. The current versions of this publication remain unchanged. The tribunal found that -
"A person does not need to have a degree in X, or to be studying for such a degree, to be employed as a Personal Care Assistant or X Assistant. The ASCO extract for "Personal Care and X Assistants" indicates the "entry level requirement" is an AQF Certificate II or higher. Neither of Mrs Assefa's employers required her to be undertaking the degree course: ST4-122 and ST5-124."
Application to your circumstances
The Tribunal has concluded that an enrolled X and a registered X were Xs whereas a X assistant, or personal care assistant, were not. In your case, it can be noted that the qualification toward which you are studying are mandatory for a registered X but not for an assistant in X. The expenses are not related to your current income earning activities but future activities.
Studies undertaken in order to obtain employment in a new field are considered to have been incurred at a point too soon to be regarded as incurred in gaining or producing assessable income and such expenses are not deductible under section 8-1 of the ITAA 1997.
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