Edited version of your written advice

Authorisation Number: 1013094412008

Date of advice: 7 October 2016

Ruling

Subject: Self-education expenses

Question 1

Can you claim a deduction for university fees paid in the 20YY financial year to undertake a course of study overseas as a self-education expense?

Answer

Yes.

Question 2

Can you claim a deduction for university fees paid in the 20ZZ financial year to undertake a course of study overseas as a self-education expense?

Answer

Yes.

This ruling applies for the following periods:

Year ending 30 June 20YY

Year ending 30 June 20ZZ

The scheme commences on:

01 July 20XX

Relevant facts and circumstances

You were employed as a teacher at a secondary college. Your duties include:

• Develop unit plans 

• Plan, prepare and deliver lessons and assessments

• Liaise with parents about student progress, behaviour 

• Mark assessment and deliver feedback 

• Maintain accurate records of student achievement 

• Manage the iPad program 

• Write reports 

• Develop and deliver professional development to teachers

• Attend school, and region meetings 

• Facilitate Department meetings 

• Recruit staff for the Department 

• Manage budget for the Department 

• Assist teachers to improve their teaching methods 

You have enrolled in a course of study overseas ('the course'). The individual subjects you will study include:

• Curriculum Development;

• Technology for Learners;

• School-based Decision Making;

• Leading Schools; and

• An internship with a variety of schools.

Your employer has provided you with unpaid leave for the duration of the course, until 20ZZ.

You prepaid some course fees in the 20YY financial year.

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 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 (FCT v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348).

However, paragraph 12 of TR 98/9 states that no deduction is allowable for self-education expenses if the study is to enable the taxpayer to get employment, obtain new employment or to open up a new income-earning activity (whether in business or the taxpayer's current employment). This includes studies relating to a particular profession, occupation or field or employment in which the taxpayer is not yet engaged.

In this case, the position description for your current role and the course outcomes align significantly. The course maintains and improves skills and specific knowledge that you exercise in your current income earning capacity.

It is considered that the study will maintain or improve your skill or knowledge used in your current income earning activity. Therefore you are entitled to a deduction for the course fees incurred.