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Edited version of your written advice
Authorisation Number: 1051210209787
Date of advice: 27 April 2017
Ruling
Subject: Work related self education expenses
Question 1
Are you entitled to a deduction for expenses incurred for a relevant Master's degree?
Answer
Yes
This ruling applies for the following periods:
Year ending 30 June 2018
Year ending 30 June 2019
The scheme commences on:
1 July 2017
Relevant facts and circumstances
You are a manager at a government agency.
You intend to study a relevant Master's degree while you continue working at the government agency as a manager.
You will incur self-education expenses for the relevant Master's degree.
Assumptions
Your role has a high degree of focus on both public policy and management.
You are accepted into the relevant Master's degree.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1.
Reasons for decision
Summary
You are entitled to a deduction for expenses incurred for a relevant Master's degree.
Detailed reasoning
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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business discusses the deductibility of self-education expenses. Paragraph 13 of TR 98/9 states:
If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self education enables the taxpayer 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 relevant Master's degree that you intend to study will enhance the skills that you possess in your current employment duties which include the implementation and development of public policy and management duties. Consequently, the self-education expenses incurred in undertaking this course have the necessary and relevant connection with the earning of your assessable income.
The course fees are therefore deductible as self-education expenses under section 8-1 of the ITAA 1997.
Note
The self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936. An explanation on how this provision operates is provided at paragraphs 119 to 155 of TR 98/9.
Expenses you can claim
Provided there is sufficient connection between your course and employment at the time you incurred the expense, the following self-education expenses are allowable tax deductions:
● tuition fees, including fees payable under FEE-HELP (this does not include expenses paid under HECS-HELP)
● FEE-HELP is a loan for eligible fee-paying students enrolled at an eligible higher education provider or Open Universities of Australia
● self-education expenses paid with your OS-HELP loan
● OS-HELP is a loan which helps students meet airfares, accommodation and other travel expenses while undertaking some of their study overseas
● textbooks, professional and trade journals
● stationery
● photocopying
● computer expenses
● student union fees
● accommodation and meals, only when participating in your course requires you be away from home for one or more nights
● running expenses if you have a room set aside for work-related study purposes - such as the cost of heating/cooling and lighting that room while you are studying in it, and
● allowable travel expenses.
Specific expenses you cannot claim
You cannot claim a tax deduction for the following expenses:
● self-education expenses such as tuition fees paid to an education provider by you or the Australian Government under HECS-HELP
● the cost of accommodation and meals associated with day-to-day living expenses, and
● repayments you make (whether compulsory or voluntary) on debts you may have under the following loan schemes
● HECS-HELP
● FEE-HELP
● OS-HELP
● SFSS.
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