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Ruling
Subject: Self education expenses - FEE-HELP
Question
Does utilising the FEE-HELP system to pay your course fees preclude you from claiming a deduction for them as a self education expense?
Answer
No
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 currently completing a post-graduate course at university.
The course is directly related to your current income-earning activity.
You are a full-fee paying student.
The course fees were paid under the FEE-HELP system.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Section 26-20
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.
Section 26-20 of the ITAA 1997 outlines the availability of deductions in respect of certain student assistant programs. There is nothing in this section or any other taxation provision that precludes a deduction for course fees incurred where a taxpayer has obtained a loan for all or part of the fees for the course under FEE-HELP.
Accordingly, if the student meets the requirements of eligibility for a deduction of their self-education expenses and is a full-fee paying student; then a deduction for the course fees can be claimed in the financial year in which the expense is incurred. For example, course fees for study undertaken in the period July to December 2011 and January to June 2012 are claimable in the 2011-12 financial year.
However, the loan fee or loading amount, which may be up to 25% of your course fee and added to your fees, is not claimable.
In your case, you have stated that your study is directly related to your current income-earning activity. Therefore, the course fees are deductible in the year in which they were incurred even though they were paid under the FEE-HELP system.