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Edited version of your written advice
Authorisation Number: 1012871324326
Date of advice: 9 September 2015
Ruling
Subject: Self-education expenses
Question and answer
Can you claim a deduction for expenses incurred in connection with a self-education course?
Yes.
This ruling applies for the following periods
Year ended 30 June 20XX
Year ended 30 June 20YY
The scheme commences on
1 July 20ZZ
Relevant facts and circumstances
You arrived in Australia on a student visa.
Upon arrival you studied and achieved a Diploma in Enrolled Nursing.
You commenced work as a casual worker in the nursing profession.
You were employed on a full time basis and were sponsored by your employer for permanent residency as an endorsed enrolled nurse.
You are currently on a bridging visa awaiting permanent residency.
You have been pursuing a Bachelor of Nursing degree course at a university as a full fee paying student. You are doing this in order to broaden your knowledge and advance your career with the view to promotion and higher salary as a nurse. You are currently in your last year of studies.
Your course fees paid for the 20XX are $X.
Your course fees paid for the 20YY are $X.
You are currently employed on a full time basis in the nursing profession.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1936 Section 82A
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 the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses 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.
Further, paragraph 26 of TR 98/9 states that expenses relating to self-education which are compulsory and unavoidable, as well as those for which a need can be shown in terms of fulfilling the requirements of the course, are regarded as being 'necessarily incurred' and are expenses of self-education.
It is considered that the study will maintain or improve your skill or knowledge used in your current income earning activity. As a consequence, you have incurred compulsory fees. Consequently you are entitled to a deduction for the course fees incurred.
Limitation on deductibility of expenses
Section 82A of the Income Tax Assessment Act 1936 operates to limit the amount of self-education expenses otherwise allowable under section 8-1 of the ITAA 1997. Only the excess of the self-education expenses over $250 may be considered for deduction under section 8-1. Therefore your claims will be reduced by $250:
For 20XX you can claim: $X - $250 = $X
For 20YY you can claim: $X - $250 = $X