Edited version of your private ruling

Authorisation Number: 1012331956840

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Ruling

Subject: Education Tax Offset

Question 1:

Are the full costs you incurred from Company X for educational software eligible for the Education Tax Offset in the year ended 30 June 2011?

Answer:

No.

Question 2:

Are you entitled to your limit for the education tax refund as incurred from Company X for educational software eligible for the Education Tax Offset in the year ended 30 June 2011?

Answer:

Yes.

This ruling applies for the following periods:

Year ended 30 June 2011.

The scheme commenced on:

1 July 2010.

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You incurred an amount for educational software from Company A in the 2010/2011 financial year.

This software was intended to assist with reading and spelling.

You were advised his/her reading and spelling was at kinder-prep level and this would be the only way to help this child.

Your payment was for educational software only.

You were provided free access to a telephone tutor and homework help service as a result of purchasing the software.

There was no specific charge for tutoring, nor was there a reduction in the purchase price if the tutoring and software assistance was not used.

Your free trial on the tutoring and software assistance is about to run out and you will have to pay an additional amount to keep accessing this service.

You received Family Tax Benefit (FTB) part A in the 2011 financial year as evidenced by correspondence you have provided from the Family Assistance Office. This states that you received FTB part A for the following children:

· Child 1 (high school), and

· Child 2 (primary school).

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 61-M

Reasons for decision

These reasons for decision accompany the Notice of private ruling for Annette Richards.

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Under Subdivision 61-M of the Income Tax Assessment Act 1997 (ITAA 1997), an education expenses tax offset (also referred to as the education tax refund) provides a partial refund of the education expenses you incurred for a school student in your care.

You are eligible to claim the offset if you incurred eligible education expenses and both of the following are true:

one of the following applied:

· you received Family Tax Benefit (FTB) Part A for the student in your care,

· a payment was made for the student which stopped you from receiving FTB Part A (for example, Youth Allowance),

· the student stopped full-time school during the year and received sufficient income to stop you receiving FTB Part A,

all of the following applied:

· during a 6 month period beginning on 1 July or 1 January there is at least one day in that 6 month period on which the student:

· was enrolled in a primary or secondary school, or is registered for home schooling, and

· attended the school or received the home schooling.

Eligible education expenses include the purchase, lease, hire or hire-purchase costs, repairs and running costs of:

· computers and related equipment and software,

· internet connections,

· computer software for educational use,

· school textbooks and other paper-based school learning material, including prescribed textbooks, associated learning materials, study guides and stationery, and

· prescribed trade tools - for example, tools required to complete a school-based apprenticeship.

The education tax offset is calculated based on a claim limit for each eligible child. The amount of the offset is the lesser of half of the eligible expenses incurred for an eligible child each year and the claim limit. The limit for the 2010-11year is:

· for primary school students - up to a maximum of $397per child per year

· for secondary school student - up to a maximum of $794 per child per year.

Therefore, as you had a child in secondary school for the year ended 30 June 2011 and a child in primary school and met all the criteria, you are entitled to a limit for the education tax refund of $397 and $794, totalling $1191.