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Edited version of your written advice
Authorisation Number: 1051240041648
Date of advice: 20 June 2017
Ruling
Subject: Self-education expenses
Questions and answers
Will your self-education expenses incurred in undertaking a Masters degree be deductible?
Yes.
This ruling applies for the following period(s)
Year ending 30 June 2017
The scheme commences on
1 July 2016
Relevant facts and circumstances
You are a full-time employee with.
You are currently employed in a management role.
You are planning to complete Masters degree.
You have been employed for a few years in a management role.
The study being undertaken is relevant to current position.
You complete one subject per term.
Your costs include textbooks, technology and public transport costs from work to university.
In 2016-17 you completed a number of subjects of study with total tuition fees of $Y.
You are paying your fees using FEE-HELP.
Your employer supports you by providing paid study leave.
The skills and knowledge you are acquiring will improve your performance in your role and will increase your earning capacity.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Income Tax Assessment Act 1936 Section 82A
Income Tax Assessment Act 1997 Section 26-20
Reasons for decision
Section 8-1 of the 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 sets out the circumstances in which self-education expenses are allowable as deductions. No deduction is allowed if the study is to enable a taxpayer to obtain new employment or to open a new field of income-earning activity.
The course will enable you to improve and supplement your existing management skills. The course will improve your ability to perform your work and may improve your chances of advancement within the company.
The expenses incurred in undertaking the course have the necessary connection with your assessable income and are deductible under section 8-1 of the ITAA 1997.
Self-education expenses that are allowable under section 8-1 of the ITAA 1997 and relate to a 'prescribed course of education', are limited in deductibility by subsection 82A of the Income Tax Assessment Act 1936 (ITAA 1936) to the net amount of self-education expenses that exceeds $250.
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.
Section 26-20 of the ITAA 1997 outlines the availability of deductions in respect of certain student assistant programs. There is nothing in this section or any other taxation provision that precludes a deduction for course fees incurred where a taxpayer has obtained a loan for all or part of the fees for the course under FEE-HELP.
Accordingly, as you meet the requirements of eligibility for a deduction of self-education expenses and are a full-fee paying student; then a deduction for the course fees can be claimed in the financial year in which the expense is incurred. For example, course fees for study undertaken in the period July to December 2017 and January to June 2018 are claimable in the 2017-18 financial year.
However, the loan fee or loading amount, which may be up to 25% of your course fee and added to your fees, is not claimable.
In your case, you have stated that your study is directly related to your current income-earning activity. Therefore, the course fees are deductible in the year in which they were incurred even though they were paid under the FEE-HELP system.
The repayments you make to the Australian Government on your FEE-HELP debt are not an allowable deduction.
The expenses you have incurred for textbooks, technology and public transport are allowable self-education expenses.
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