Edited version of private ruling

Authorisation Number: 1011638609698

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Ruling

Subject: education tax refund

Question

Does a camera and accessories qualify as eligible education expenses for the purposes of the education tax refund (ETR)?

Answer

Yes.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

Your child is attending high school.

They are undertaking a photography and media subject.

As part of this subject they are also undertaking a vocational course at TAFE.

You have purchased a camera and accessories for their use in this subject.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 61-M.

Income Tax Assessment Act 1997 Section 61-640.

Reasons for decision

The Education Tax Refund (ETR) is a government initiative to help with the cost of educating primary and secondary school children. Eligible parents, carers, legal guardians and independent students may be entitled to a refundable tax offset equal to 50 percent of eligible education expenses: subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997).

For the purposes of the ETR eligible education expenses are items that support a child's schooling and education covering the purchase, lease, hire or hire-purchase cost of (section 61-640 of the ITAA 1997):

· laptops, home computers and associated costs,

· computer-related equipment such as printers, USB flash drives as well as disability aids to assist the use of computer equipment for students with special needs;

· home internet connection, including the costs of establishing and maintaining;

· computer software for educational use word processing, spreadsheet, database and presentation software and internet filters and antivirus software

· school textbooks, other paper-based school learning materials including prescribed textbooks, associated learning materials, study guides and stationery; and

· a tool of trade.

In your case, you have purchased a camera and accessories for your child's photography class. A camera would need to be a tool of trade to be considered an eligible education expense. What constitutes a tool of trade is not defined within the provisions and would therefore largely take on its ordinary meaning: an instrument of manual operation (tool) commonly used in a specific occupation.

The definition, therefore, has two elements, the instrument (tool) and the occupation (trade), and it is considered both elements need to be present for the acquisition costs to be an eligible expense for ETR purposes. Thus the cost of tools as part of an elective subject such as woodwork would not necessarily qualify as an eligible expense. The tools would need to be acquired as part of a vocational training subject aimed at developing occupational/trade skills.

Your child is completing a vocational training course and the camera and accessories are tools of trade relevant to this occupational/trade. Therefore the camera and accessories are considered to be eligible education expenses for the purposes of the ETR.