Edited version of private advice

Authorisation Number: 1051819884239

Date of advice: 13 April 2021

Ruling

Subject: Self-education expenses

Question

Are you entitled to a deduction for the self-education expenses incurred in studying four units of study to complete a Master of Information Technology (IT Management)?

Answer

Yes. 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 earning exempt income.

Taxation Ruling TR 98/9 states 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 the self-education enables you to maintain or improve that skill or knowledge. A deduction is also allowable if the education is likely to lead to an increase in income from your current income earning activities.

Based on the facts and analysis of your circumstances, the four units of study maintain or improve skills or knowledge you need in your current income-earning activities. Therefore, the expenses incurred are considered allowable deductions under Section 8-1 of the ITAA 1997.

However, you cannot claim a deduction for the tuition fees reimbursed by your Employer. Further information can be found by entering Quick Code reference QC 61642 into the search function of our website ato.gov.au.

This ruling applies for the following periods

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You commenced full time employment with your Employer. You are currently employed as an IT Support Administrator.

You have recently completed units of study to obtain a Graduate Diploma in Information Technology Management (Graduate Diploma). Your Employer paid a portion of the tuition fees.

You were issued a private ruling advising you were entitled to claim a deduction for the self-education expenses associated with studying the Graduate Diploma, limited to the expenses not reimbursed by your Employer.

The Graduate Diploma was completed as part of a Master of Information Technology majoring in IT Management (Masters Course).

Your job title has changed but your job description remains the same.

You are undertaking the last four units of study in order to complete the Masters Course.

The continuation of the Masters Course will allow you to further develop and build your current abilities and bring value to your role in the organisation.

You will incur tuition fees to complete the remaining units.

Your Employer will continue to support you and your study by providing flexible working arrangements and committing to reimburse you a portion of your tuition fees based on you passing.

You will incur costs for textbooks, stationery and other resources required for your studies.

You are not paying the tuition fees using the Higher Education Loan Program.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

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