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Edited version of private ruling
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Ruling
Subject: Self-education expenses
Are you entitled to a deduction for self-education expenses for flying lessons?
No.
This ruling applies for the following periods:
Year ended 30 June 2011
Year ended 30 June 2010
The scheme commenced on:
1 July 2009
Relevant facts
You are employed in a non flying role.
You have taken private flying lessons.
You are hoping to obtain a position as a pilot with your current employer.
Relevant legislative provisions
Income tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 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 circumstances in which 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 self-education enables you to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.
If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in your income from your current income-earning activities in the future, the self-education expenses are allowable deduction.
Paragraph 15 of TR 98/9 also mentions that no deduction is allowable for self-education expenses if the study is to enable you to obtain employment, to obtain new employment or to open up a new income-earning activity (whether in business or in your current employment). This includes studies relating to a particular profession, occupation or field of employment in which you are not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.
In your case:
· You have taken private flying lessons to obtain a pilots position.
· The expenses were not incurred in your current position or training for your current position, but to open up another field.
Therefore, you are not entitled to a deduction for the expense incurred for the flying lessons and other expenses incurred.