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Edited version of private ruling
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Ruling
Subject: Self education
Question
Are you entitled to a deduction for self education expenses?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
The scheme commenced on
1 July 2010
Relevant facts
You are a resident for tax purposes.
You are currently working for an employer as a Manager but are considering changing to work for a different employer. In both positions, your role and responsibilities are that of Manager.
Your section comprises portfolio, sales and delivery.
You would form part of the senior leadership team and in the longer term, there may be an opportunity to secure a share of equity within the business.
You expect to remain in this role whilst you complete your Master's degree.
You are considering undertaking a relevant Master's degree.
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 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 (Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348).
Similarly, if the study of a subject of self education objectively leads to, or is likely to lead to an increase in a taxpayer's income from his or her current income earning activities in the future, a deduction is allowable.
In your case, it is accepted that your degree would maintain or enhance the skills that are required in the performance of your current employment duties and your future employment. Consequently the self education expenses incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductible under section 8-1 of the ITAA 1997.