Edited version of your private ruling

Authorisation Number: 1012536429131

Ruling

Subject: Travel expenses

Question 1

Are you entitled to a deduction for the costs incurred for a self-education and research trip?

Answer

No.

Question 2

Are you entitled to a deduction for the cost of educational resources purchased while on the trip?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 2013

The scheme commences on:

1 July 2012

Relevant facts and circumstances

You are a teacher.

You were advised that you would be teaching a unit that you hadn't taught before.

You planned a trip to get first hand experience and knowledge on the topic.

You kept a detailed diary as a teaching aid.

Photos were taken and educational resources were bought for the classroom.

Maps and booklets were collected and meetings were also organised.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

The knowledge that you have gained from your trip is too general in nature for the expenses to be considered to be incurred in the course of gaining your assessable income. Accordingly, the travel expenses you incurred for your trip are not deductible. However, costs incurred for any purchased resources or photographs are deductible to the extent they are used in your teaching activities. 

Detailed reasoning

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.

Taxation Ruling TR 98/9 states self-education expenses are allowable as a deduction if your current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables you to maintain or improve that skill or knowledge. A deduction is also allowable if the education is likely to lead to an increase in income from your current income earning activities.

However, if the subject of the self-education is too general in terms of your income-earning activities, the necessary connection between the self-education expense and the income-earning activity does not exist.

In Case U109 87 ATC 657 (Case U109), 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 although the taxpayer may have been a better teacher because of the travel, this fell short of the sufficient connection required between the travel and their income earning activities. The AAT 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.

In your case, you went on a self-planned and guided trip. This trip may have broadened your teaching skills and knowledge and provided resources for you to use in the classroom; however, these reasons are not enough to demonstrate a sufficient connection between the travel and your income producing activities. Your circumstances are considered similar to Case U109. Furthermore there is no evidence to show that your travel will increase your income in your current work activities.

Accordingly, the travel expenses you incurred for your trip are not deductible under section 8-1 of the ITAA 1997.

Educational Resources

The deductibility of work related expenses for teachers is discussed in Taxation Ruling TR 95/14. Paragraph 205 of the ruling specifies that teaching aids purchased by teachers to be used in the course of carrying out their duties of employment are deductible to the extent they are not private, domestic or capital in nature.

The items purchased must have a direct and relevant use in carrying out those duties. Examples of teaching aids in TR 95/14 include stationery, books and items used to conduct classes.

If an item or article is used for both work-related and other purposes, then the cost must be apportioned and a deduction claimed only for that proportion which is work-related.

Accordingly, costs incurred for any purchased resource or photographs are deductible to the extent they are used in your teaching activities.