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This edited version has been archived due to the length of time since original publication.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.

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Edited version of private advice

Authorisation Number: 1051670536750

Date of advice: 07 May 2020

Ruling

Subject: Self-education expenses - hot air balloon training

Question 1

Are you entitled to claim a self-education deduction for the training fees paid to the Australian Balloon Federation under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

Yes. Your expenses meet the requirements in Taxation Ruling 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business (TR 98/9).

Question 2

Are you entitled to claim a self-education deduction for the hot air balloon fuel and hire under section 8-1 of the ITAA 1997?

Answer 2

Yes. Your expenses meet the requirements in TR 98/9 and are an eligible deduction.

Question 3

Are you entitled to claim a full deduction for accommodation expenses under section 8-1 of the ITAA 1997?

Answer 3

No. However, you will be able to claim a partial deduction for this expense for the portion that can be reasonably apportioned as being attributable to you. The apportioned expense meets the requirements in TR 98/9.

This ruling applies for the following period:

Year ending 30 June 2019

The scheme commences on:

1 July 2018

Relevant facts and circumstances

You are an Airworthiness Inspector.

You do not have a job description but your job involves:

·   Auditing the maintenance and other operational aspects of helicopters, fixed wing aircraft and hot air balloons.

·   Inspecting workshops to ensure that they are being run properly, and

·   Issuing approvals to operate aircraft.

Your work mainly entails auditing helicopter and fixed wing aircraft operators, but less frequently you audit hot air balloon operators.

You have extensive experience in auditing balloon operators.

In Australia there are no mandatory qualifications and there are no minimum experience requirements to audit balloon operations.

A balloon audit entails:

·   Inspecting the basket, burner, flames, cables and the fabric.

·   Observing operations, which includes going flying with operators to observe how they operate.

You have never received any formal training for auditing hot air balloon operations, instead you learned by:

·   Flying with balloon pilots and visiting, speaking to and auditing balloon operators.

·   Self-funded training.

You attended a hot air balloon training camp for private operators.

You were offered the use of a balloon for the camp at a greatly reduced cost.

Whilst attending the training you paid the accommodation expenses of both yourself and another.

You were at the camp for a week and:

·   Observed four balloon maintenance events.

·   Did five and a half hours of flying with three different instructors.

·   Attended theory training in a classroom which involved:

-   The legal aspects of ballooning responsibilities and procedures.

-   Issues around the maintenance approvals required every two years.

-   How to check equipment which included things to look for. For example, checking the use by dates on a hose.

You could have just observed flights and saved the hire and fuel costs, but flying the balloon gave you a better understanding of what was involved and the way that instructors teach.

The cost of commercial balloon training in Australia was prohibitive.

You did not sit the necessary exams, nor do the flight test, to gain your Australian licence. You attended the training only for the purposes of gaining a better understanding of the practical aspects of the industry and becoming a better inspector.

You are not interested in hot air ballooning for your own leisure.

Your employer did not reimburse you for any of the expenses.

There would be no pay rise as a result of the training.

You do not think there will be a new job or role as a result of the training.

Relevant legislative provisions

Income Tax Assessment Act 1997

 

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