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Edited version of your written advice
Authorisation Number: 1012960403976
Date of advice: 5 February 2016
Ruling
Subject: Self-education expenses
Question
Are you entitled to a deduction for your self-education expenses?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2016
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
Year ended 30 June 2020
Year ended 30 June 2021
The scheme commences on:
1 July 2015
Relevant facts and circumstances
You are employed as a project manager.
You are undertaking a business course.
As identified in performance reviews with your employer developing further skills in various business management areas would be greatly beneficial to your value to your employer and completing the course contains the necessary course structure including finance, accounting and management coursework that will provide skills and knowledge in your role.
You are paying for your fees via FEE-HELP.
Your employer is providing study leave without any loss of annual leave.
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.
The courts have considered the meaning of 'incurred in gaining or producing assessable income'. In Ronpibon Tin NL & Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; (1949) 56 ALR 785; (1949) 8 ATD 431 the High Court stated that:
For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing the assessable income it must be incidental and relevant to that end. The words incurred in gaining or producing the assessable income mean in the course of gaining or producing such income.
Taxation Ruling TR 98/9 discusses circumstances in which self-education expenses are allowable as a deduction. If your current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables you to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.
In your case, it is accepted that the course you are undertaking will maintain or enhance the skills that are required in the performance of your current employment duties. Consequently the self-education expenses incurred in undertaking the course 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.
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