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Edited version of your private ruling
Authorisation Number: 1012551940960
Ruling
Subject: Self education
Question
Are you entitled to a deduction for self education expenses?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2014
Year ended 30 June 2015
Year ended 30 June 2016
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
The scheme commenced on
1 July 2013
Relevant facts
You are employed as a professional in field A.
You are undertaking a Diploma in Field B.
Relevant legislative provisions
Tax Assessment Act 1997 Section 8-1
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, or relate to the earning of exempt income.
Taxation Ruling TR 98/9 discusses circumstances in which self education expenses are allowable as a deduction under section 8-1 of the ITAA 1997. If a taxpayer's current income earning activities are based on the exercise of a skill or some specific knowledge and the self education enables the taxpayer to maintain or improve that skill or knowledge, the self education expenses are allowable as a deduction.
The decision in FC of T v. Maddalena 71 ATC 4161; 2 ATR 541 also supports the Commissioner's view that no deduction is allowable if the study is designed to enable a taxpayer to open up a new income earning activity, whether in business or in the taxpayer's current employment. This would include studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged.
You are a professional in field A. From the list of skills, knowledge and experience required to perform your duties it is clear that your role focuses on your specific field.
Although you may gain knowledge and skills from the course that could be of some assistance in your work, the predominant focus of the course is for those entering into the law profession. It is considered that there is an insufficient connection between the skills and knowledge required in your current duties and the course. Furthermore, it is considered that the study is designed to open up a new income earning activity.
As there is an insufficient nexus between the course of self education and your current income earning activities, the self education expenses associated with the course are not incurred in earning your assessable income. Consequently you are not entitled to a deduction for the expenses.