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Edited version of private ruling
Authorisation Number: 1011611999860
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Ruling
Subject: Self-education expenses
Question and answer:
Are you entitled to include the course fees paid to undertake a course relating to your income-earning activities when calculating your self-education deduction?
Yes.
This ruling applies for the following period:
Year ended 30 June 2010
The scheme commenced on:
1 July 2009
Relevant facts and circumstances
In the income year you owned your own small business and worked as an employee. Both of these income earning activities were in the same industry.
In the same income year you undertook a course relating to your income earning activities.
You incurred fees in order to undertake this course.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Income Tax Assessment Act 1936 Section 82A.
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.
In your case, from the information you have supplied, it is accepted that the course directly relates to your income earning activities and enables you to maintain and improve your skills and knowledge required to undertake your income earning activities.
Therefore, you are entitled to include in your calculation of your self-education deduction the fees paid to undertake this course.
The self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936.