Edited version of private ruling

Authorisation Number: 1011756942938

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Ruling

Subject: Self-education expenses

Question 1

Are you entitled to a deduction for the cost of the air fares?

Answer

Yes.

Question 2

Are you entitled to a deduction for the cost of the conference attendance?

Answer

Yes.

Question 3

Are you entitled to a deduction for your accommodation and living expenses while at the location where the conference is being held?

Answer

Yes, in part.

Question 4

Are you entitled to a deduction for your accommodation and living expenses while at stopovers?

Answer

Yes.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commences on:

1 July 2010

Relevant facts and circumstances

You are employed as a subject matter expert in a professional field.

You wish to attend an overseas conference related to that field.

You wish to stop-off in two cities to visit sites related to your field.

You will not be receiving an allowance from your employer while away.

Travelling to and attendance at the conference will:

· re-enforce your current knowledge

· allow you to meet with various specialists in the field

· give you an understanding of the current commitments of experts in the field

Your proposed itinerary includes stopovers when travelling to and from the conference.

You also intend to spend a couple of days in the city where the conference is being held before the conference begins.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision

Summary

You are entitled to a deduction for the cost of air fares and conference attendance; accommodation and living expenses at stopovers; and your accommodation and living expenses incurred at the city where the conference is held during the days the conference is on as there is a sufficient connection to your income producing activities. You are not entitled to a deduction for the costs of accommodation and living expenses during the time spent in the city the conference is being held in the days leading up to the conference.

Detailed reasoning

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 explains how this provision applies for self-education expenses. Paragraph 13 of TR 98/9 states:

If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.

TR 98/9 goes on at paragraph 23 to say that subject to the general tests under section 8-1 of the ITAA 1997 being met, airfares incurred in attending educational institutions are allowable as a deduction as are the accommodation and meal expenses where the taxpayer is away from home for that purpose.

Where an apportionable expenditure is a single outlay that serves both an income-earning purpose and some other purpose, a fair and reasonable division of the cost is appropriate. Where a study tour or work-related conference or seminar is undertaken equally for income-earning purposes and private purposes, it would be appropriate to apportion the expenses equally between the purposes.

In your case you have incurred expenses to visit a conference and other locations related to your field to maintain and improve your knowledge in the same field as your income-producing activities. You are therefore entitled to a deduction for the costs of your airfares, the cost of attending the conference and the cost of accommodation, food, drink and incidentals while at your stopovers. You are also entitled to a deduction for the costs incurred for accommodation, food, drink and incidentals incurred in the city where the conference is being held for the days the conference is on. You are not entitled to a deduction for these costs for the days spent in the city where the conference is being held before the conference begins. These expenses lack the sufficient connection to your income producing activities.

As you are not receiving an allowance from your employer you are not eligible for the substantiation exclusion under the Commissioner's discretion for reasonable amounts. Therefore in order to claim a deduction for your expenses related to food, drink and incidentals you are required to retain evidence of your expenditure.

Note

Section 900-20 of the ITAA 1997 requires a travel record to be kept if your expense is for travel that involves you being away from your ordinary residence for 6 or more nights in a row. A travel record is a record of activities undertaken during the travel (Subdivision 900-F of the ITAA 1997). It is not a record of expenses incurred during the travel. The purpose of a travel record is to show what activities were undertaken in the course of producing assessable income, so that expenses or portions of those expenses can be attributed to those income-earning activities.