Edited version of private advice

Authorisation Number: 1052083324872

Date of advice: 15 February 2023

Ruling

Subject: Deductions - self-education

Question 1

Are you entitled to a deduction for self-education expenses incurred in undertaking two training programs through an Institute?

Answer

Yes.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are employed as a medical professional.

During the 20XX financial year, you undertook training programs through an Institute.

You provided a letter form the employer (the letter) stating that the trainings are relevant to your role.

The trainings were supported by your employer through approval of study leave and partial reimbursement for the course.

You paid for the trainings.

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 Income tax: deductibility of self-education expenses incurred by an employee or a person in business discusses the circumstances under which self-education expenses are allowable as a deduction. Self-education expenses are deductible where:

• the taxpayer's income-earning activities are based on the exercise of a skill or specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge, or
• the study of the subject of self-education objectively leads to, or is likely to lead to, an increase in the taxpayers' income from their current income-earning activities in the future.

No deduction is allowable for self-education expenses if the study is:

• to enable the taxpayer to get employment
• to obtain new employment, or
• to open up a new income-earning activity (whether in business or in the taxpayer's current employment).

Paragraph 41 of TR 98/9 describes the example of Barry, a trainee accountant, who is studying commerce part-time at university. He is allowed a deduction for the costs associated with the course because the course enables Barry to maintain or increase the specific knowledge required in his current position and to carry out his duties more effectively.

TR 98/9 goes on to say that if a course of study is too general in terms of the taxpayer's income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist meaning that no deduction for self-education expenses would be allowable under section 8-1 of the ITAA 1997.

Application to your circumstances

In your role as a medical professional, the trainings are relevant to your role. The trainings were also supported by your employer through approval of study leave and partial reimbursement for the course.

It is accepted that the trainings meet the requirements detailed in Taxation Ruling TR 98/9 therefore you are entitled to a deduction for self-education expenses.

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