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Ruling
Subject: Self education expenses
Question:
Are you entitled to a deduction for the course fees incurred to undertake study?
Answer:
Yes.
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commences on:
01 July 2011
Relevant facts and circumstances
You are an employee.
You are undertaking study.
Your employer confirms that your studies enhance your ability to perform your role as an employee of the company.
Your employer has confirmed that your studies are relevant to your work and subsequent professional development within the company.
You are a full fee paying student.
Your employer has not subsidised you for any of these expenses.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 82A and
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.
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 the study you are undertaking will enhance the skills required in the performance of your duties as an employee. Consequently, the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income.
Therefore, you are entitled to a deduction for your self-education expenses under section 8-1 of the ITAA 1997