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Ruling
Subject: Self education
Question
Are you entitled to a deduction for self education expenses?
Answer
Yes.
This ruling applies for the following periods
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You are employed full time as a graduate trainee.
You are undertaking a degree.
Your employer encouraged you and granted you paid and unpaid leave to attend part of the course.
Your employer has also written a letter confirming their support.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 states that you can deduct from your assessable income any loss or outgoing to the extent to which it is incurred in gaining or producing your assessable income, except where the loss or outgoing is of a capital, private or domestic nature.
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 (Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348).
Taxation Ruling TR 98/9 also states that 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, the self-education expenses are allowable as a deduction.
In your case, it is considered that the course you are undertaking will enhance your skills and knowledge to perform your current income earning activity. You are therefore, entitled to a deduction for self education expenses.