Edited version of private ruling

Authorisation Number: 1011766096387

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Ruling

Subject: Education Tax Refund

Questions and Answers

Is the fee you are required to pay the school for Child 1 for ingredients for the cooking classes an eligible expense for the Education Tax Refund (ETR)?

Answer: No

Is the cost of ingredients you are required to purchase for the compulsory cooking classes for Child 2, an eligible expense for the ETR?

Answer: No

This ruling applies for the following periods:

Year ended 30 June 2010

Year ending 30 June 2011

The scheme commenced on:

1 July 2009

1 July 2009

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You have two children who are currently receiving primary school education.

Child 1 does cooking at the school he attends. The school provides the ingredients for the cooking. You are sent an account stating the amount you are required to pay for the ingredients.

Your child, with the aid of the teacher prepares the food. The food is either eaten by your child at school, brought home for eating or put in the bin.

Child 2 is studying a compulsory cooking subject at school. You are required to purchase the ingredients so your child can cook. If the ingredients are not provided he fails the subject.

You provided a list of the recipes which are to be prepared during the first term for 2011. Most of the recipes are to be consumed at school.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 61-640 and

Income Tax Assessment Act 1997 subsection 61-640(4).

Detailed reasoning

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 (subsection 61-640(4) of the Income Tax Assessment Act 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.

The Explanatory Memorandum to the Tax Laws Amendment (Education Refund) Bill 2008 Tax Laws Amendment (Education Refund) Act 2008 states that where an expense is not specified in the legislation, it will not be eligible for inclusion in the ETR.

The Explanatory Memorandum specifically lists those expenses that are not eligible expenses for the purposes of the tax offset. Contained in this list of examples is "school subject levies - for example, payment for consumables for particular subjects such as woodwork, art or home science". In this context the term consumables refers to items such as wood and nails for woodwork, paints and canvasses for art, grocery items and material for home science. These items are not eligible for inclusion in the ETR as they do not meet the definition of eligible education expenses.

In your case, you pay a certain amount of money each time Child 1 does a cooking class. This amount is based on your child's share of the ingredients that are required for the class. In regards to Child 2, you purchase the ingredients each time your child does a cooking class at school. While it is not a 'subject levy', the fee paid by you for Child 1 is for the payment of consumables as much as the payment by you for the ingredients for child 2. As such, both fall for consideration as expenses that are not eligible expenses for the purposes of the ETR.