| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012013674676
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Education tax refund
Question
Are you entitled to include a portion of your costs for a bundled telephone and internet connection in an education tax refund (ETR) claim?
Answer
Yes.
This ruling applies for the following periods
Year ended 30 June 2011
Year ending 30 June 2012
The scheme commences on
1 July 2010
Relevant facts and circumstances
You have a child in primary school.
You have a home internet connection which is bundled with your home phone. The monthly charge is one fixed amount for both of these services.
You have contacted the provider and were told that they cannot advise what portion of the fixed fee is attributed to the internet connection. So you are unable to determine what amount you actually incurred in relation to your internet expenses.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 61-M
Income Tax Assessment Act 1997 Section 61-640
Reasons for decision
Under Subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997), an education expenses tax offset also referred to as the ETR provides a partial refund of the education expenses you incur for a primary or secondary school student in your care.
For the purposes of the ETR eligible education expenses are items that support a child's or independent student's primary or secondary school education. Section 61-640 of the ITAA 1997 mentions the kind of expenses that are eligible education expenses. It includes the running costs of a home internet connection.
In your case your home phone and internet are bundled under one fixed fee, and there is no break up of the cost of each item.
Where an expense is incurred for more than one purpose, the item of expenditure is generally apportioned into its deductible and non-deductible components. The Commissioner believes that the method of apportionment must be fair and reasonable.
The Commissioner would consider it reasonable to allocate the bundle fee equally between the phone and internet. Therefore this method of apportionment may be used in order to determine the amount to claim under the ETR for your internet connection.
To be eligible to claim the ETR, the parent or carer would need to have received FTB part A for the child. Therefore, while the internet cost is considered an eligible education expense, a parent or carer would not be able to claim this expense unless they were entitled to claim the ETR. For more information on the ETR, please refer to the Tax Office website at www.ato.gov.au.