Edited version of private ruling

Authorisation Number: 1011820065206

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Ruling

Subject: Self-education expenses

Question 1

Are you entitled to a deduction for the cost of airfares, accommodation and course fees?

Answer: Yes.

Question 2

Are you entitled to a deduction for the cost of travel insurance?

Answer: No.

This ruling applies for the following period

Year ending 30 June 2012

The scheme commenced on

1 July 2011

Relevant facts

The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:

· the application for private ruling,

· copy of the course information and travel details.

You are a clergyman.

You are required to do annual in-service/retreat.

You will be attending a two week course at an overseas theological studies institute.

You will be arriving in the overseas country on the morning of the first day of the course and departing the day after the course ends.

You have incurred expenses for the full airfares, course costs and travel insurance.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision

Section 8-1 of the 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.

In your case, it is accepted that the studies course will maintain or enhance the skills that are required in the performance of your current role. Consequently, the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income. You are therefore entitled to a deduction under section 8-1 of the ITAA 1997 for the cost of the airfares, accommodation and course fees incurred in order to attend the course.

The self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936.

An explanation of how this provision operates in relation to working out your self education expenses is provided at paragraphs 119 to 155 of TR 98/9, which can be accessed on our website www.ato.gov.au or pages 37 and 38 of TaxPack 2010.

Travel insurance

Expenses such as insurance policies invariably cover items that are generally private in nature, for example illness, loss of baggage, and theft or damage to belongings. Therefore you are not entitled to a deduction for of travel insurance as the expenditure is private in nature.