Edited version of your private ruling

Authorisation Number: 1012529915491

Ruling

Subject: Self education

Question

Are you entitled to a deduction for the cost of attending a conference?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2015

The scheme commenced on

1 July 2014

Relevant facts

You are an employee.

Your duties involve looking after gardens and lawn areas.

You hold a Certificate 3 in horticulture and a member of several different plant societies.

You are considering undertaking a conference.

You are a member of the specific plant society and these plants form a part of the gardens.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Self education expenses generally fall for consideration under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). 

This section allows a deduction for losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent to which they are capital, private or domestic in nature.

To be deductible under this section an expense must have the essential character of an expense incurred in gaining or producing assessable income or, in other words, of an income-producing nature.

The Commissioner's view on the deductibility of self education expenses is contained in Taxation Ruling TR 98/9. In accordance with TR 98/9, expenses of self education are allowable if:

· a taxpayers income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self education enables the taxpayer to maintain or improve that skill or knowledge, and

· the study of a subject of self education objectively leads to, or is likely to lead to, an increase in a taxpayers income from his or her current income-earning activities in the future.

In Case U109 87 ATC 657, the taxpayer was a science teacher who specialised in geology and was the head of the school science department. He undertook a 17 day trip to Indonesia organised by a natural museum history society of which he was a member. During the course of the trip he visited several volcanoes and other geological sites, and attended a geological congress. He also visited some tourist attractions. The taxpayer took many slides of the geological sites and prepared a taped commentary which he used in his teaching on his return.

The Administrative Appeals Tribunal (AAT) examined previous court decisions dealing with teachers who had claimed for the cost of overseas travel. It concluded that the trip was essentially recreational in character and not deductible. The AAT also stated that some taxpayers are fortunate in finding personal and recreational satisfaction in their field of endeavour and that in this case the trip was recreational in character and not deductible.

The principles in the above case are similar to this case. While we accept that you are a horticulturalist and that you have specific plants growing in the gardens where you work, it is not considered that the conference is sufficiently connected to the duties of a gardener and any knowledge gained is well above that which you require to fulfil your employment duties. Supporting this claim is the fact that your employer has refused to allow you to take leave or allow time to undertake the conference.

Furthermore, it is considered that participation in this conference is more directly connected with your personal interest in the plants.

You are therefore not entitled to a deduction for costs relating to the conference.