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Edited version of your written advice
Authorisation Number: 1013069715841
Date of advice: 10 August 2016
Ruling
Subject: Deductibility of self-education expenses
Question 1
Are you entitled to claim a deduction for self-education expenses for a Diploma of Business Administration?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 2015
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You commenced studying a Diploma of Business Administration in 20XX.
At the time of studying you were employed in your current position.
You undertook the further study as suggested by your immediate supervisor to increase your general knowledge of business administration.
As a result of completing the course, your responsibilities have not changed but your work load has increased.
You advised that the course expanded your qualifications to include:
• Up to date business practices
• Management of conflicting business and team priorities
• Workforce planning
• Project work - management through to delivery
• Planning and delivery of research
• Training in the latest technologies used across the duties including various meeting options including skype, webinar, teleconferencing
Relevant legislative provisions
Income 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.
Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable if the course has sufficient connection to your current employment and maintains or improves the specific skills or knowledge you require for you current employment.
However, no deduction is allowable for self-education expenses if the study is designed to enable a taxpayer to open up a new income-earning activity, whether in business or in the taxpayers current employment. Such expenses of self-education are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income and such expenses are not deductible.
Application to your circumstance
You have stated that the Diploma in Business Administration expands your qualifications. It is accepted that the knowledge you have gained in this course may assist you in your current role. However, that benefit is only incidental as your studies are providing you with knowledge and skill at a higher level than that required for your current position. The subjects studied all relate to management.
As the course subjects relate to management, they are at a higher level than what you require for your current role. This course is considered to be enabling you to open up new income-earning activities in a management role, which you are not currently employed.
Accordingly, it is not accepted that the course of study and subsequent abilities gained had the necessary and relevant connection to the skills required for your current employment. Consequently, your self-education expenses are not deductible under section 8-1 of the ITAA 1997.