| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012851323989
Date of advice: 30 July 2015
Ruling
Subject: Self-education expenses
Question 1
Are you entitled to a deduction for your course fees as a self-education expense?
Answer
No.
Question 2
Are you entitled to a deduction for other expenses relating to your course as self-education expenses?
Answer
Yes.
This ruling applies for the following period:
Year ended 30 June 2015
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You are employed.
You are enrolled at university to undertake a Masters.
The course is related to your employment.
You have a Commonwealth supported place at university.
You pay your student contribution upfront.
You have incurred other expenses in relation to your course.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Income Tax Assessment Act 1997 Section 26-20.
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 states self-education expenses are allowable as a deduction 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.
Course fees
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.
Other expenses
In your case, it is considered that the course will increase your skills and knowledge in your current income earning activity. Therefore, you are entitled to a deduction for the cost of text books and stationery.