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Ruling
Subject: Self-education expenses
Question
Are you entitled to a deduction for your course fees as a self-education expense?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commences on:
1 July 2008
Relevant facts and circumstances
You commenced a degree course at a university.
You worked full time and your studies directly related to your employment.
Your subjects were Commonwealth supported and included a student contribution amount.
Your fees were paid upfront with a discount.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Subsection 26-20(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, relate to the earning of exempt income or a provision of the ITAA 1997 prevents it.
Taxation Ruling TR 98/9 discusses the circumstances under which self-education expenses are allowable as a deduction. TR 98/9 explains at paragraph 24 that a student contribution amount or debt repayment amount specified in section 26-20 of the ITAA 1997 is not an allowable deduction under section 8-1 of the ITAA 1997.
Subsection 26-20(1) of the ITAA 1997 prevents a deduction for certain assistance provided to students. You cannot claim a deduction for:
· a student contribution amount within the meaning of the Higher Education Support Act 2003 paid to a higher education provider, or
· a payment made to reduce a debt to the Commonwealth under Chapter 4 of that Act
This is whether the fees are paid up front as a discounted amount, or deferred for payment at a later date in an annual income tax assessment.
In your case, you studied Commonwealth supported subjects with a student contribution amount. Subsection 26-20(1) of the ITAA 1997 denies a deduction for these expenses. Therefore you are not entitled to claim a deduction in respect of the course fees.