Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1051277984909

Date of advice: 4 September 2017

Ruling

Subject: Self-education expenses

Question 1

Are you entitled to a deduction for self-education expenses incurred in obtaining a helicopter pilots licence?

Answer

No.

This ruling applies for the following periods:

Year ending 30 June 2017

The scheme commences on:

1 July 2016

Relevant facts and circumstances

You are employed by a helicopter operator on a full time basis.

You are employed as a helicopter air crewman.

You work on a Rescue Helicopter.

Your duties include those typical with an air crewman.

While employed with your current employer you undertook a course to gain your helicopter pilots licence.

You attended this training in your standby time.

The course provided:

It might be prudent for an air crewman to be able to fly the helicopter if the pilot becomes incapacitated. However, your employer does not require you to have a helicopter licence as part of your employment.

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).

Similarly, if the study of a subject of self-education objectively leads to, or is likely to lead to an increase in a taxpayer's income from his or her current income earning activities in the future, a deduction is allowable.

The decision in FC of T v. Maddalena 71 ATC 4161; 2 ATR 541 supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged.

In your case you are employed as an air crewman for a rescue helicopter service. You undertook a course to gain your helicopter pilot’s licence. Although you may gain some knowledge or skills from the course that could be of assistance in your work, there is insufficient nexus between your current duties and the course for a deduction to be allowable. In addition as a result of undertaking this course there is no indication your salary as an air crewman has or will increase in the future.

The predominant focus of the course was to attain your helicopter pilot’s licence, which is not required to fulfil your current duties. Therefore, you are not entitled to a deduction for self-education expenses.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).