Edited version of private ruling

Authorisation Number: 1011789040978

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Ruling

Subject: Education Tax Refund

Question

Are you allowed to include the cost of a camera as part of an Education Tax Refund (ETR) claim?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2011

The scheme commences on:

1 July 2010

Relevant facts and circumstances

You have an autistic child.

Your child attends primary school.

Your child's understanding and learning abilities are mainly through visuals, photos and pictures.

You are seeking to buy your child their own camera.

You feel the camera will help your child significantly with their understanding and ability to learn.

Relevant legislative provisions

Income Tax Assessment Act 1997 Ch2-Pt2-20-Div61-SDiv61-M and
Income Tax Assessment Act 1997 Section 61-640.

Reasons for decision

Summary

The camera is not eligible for the ETR as it is not included on the list of eligible items.

Detailed reasoning

The 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% of eligible education expenses up to a set limit: 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.

Disability aids

The ETR applies to items that are disability aids to assist the use of computer equipment for students with special needs. Examples of items that fall into this section include alternative keyboards and mice and switches that can be used to control the computer.

Trade tools

As noted above, eligible expenses for the purposes of the ETR provisions include the cost of acquiring a tool of trade.

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. This would include, for example, items such as a saw, hammer or file for a carpenter. Sports and cooking equipment (for example, a stove or saucepan) would not, however, constitute a tool.

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.

Whether or not a subject is a vocational course or a general elective is a question of fact. Courses run in senior years that involve external workshop or training facilities (e.g. a TAFE) and a recognised trade qualification would more likely be considered a vocational course than one which had none of these features.

In your case you are seeking to buy your child a camera to assist them with their learning. The camera could qualify as an eligible education expense if it can properly fall within the item 'disability aids to assist the use of computer equipment for students with disabilities'. While the camera may be a disability aid, it is not used in assisting the use of computer equipment.

Cameras can also fit the definition of a trade tool. However it would need to be acquired as part of a vocational training subject. As your child won't be using the camera to develop occupational/trade skills the camera doesn't fit into the definition of a trade tool.

It is considered that the camera is not an eligible education expense for the purposes of the ETR.