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Edited version of your written advice
Authorisation Number: 1013134730554
Date of advice: 6 December 2016
Ruling
Subject: Self-education expenses
Question
Are you entitled to a deduction for expenses to have your overseas qualification recognised in Australia?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 2016
The scheme commences on:
1 July 2015
Relevant facts and circumstances
You are currently employed as a Lecturer at a University.
You are qualified in your field and obtained your qualification overseas.
This qualification is not recognised within Australia.
In order to become registered within Australia you are required to complete a series of examinations administered by the relevant Council of Australia and the overseas country.
You have incurred expenses associated with obtaining an Australian qualification.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for losses and outgoings which are incurred in the course of gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature.
Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business 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.
In addition, if the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from his or her current income-earning activities in the future, the self-education expenses are allowable as a deduction.
However, the decision of the High Court in Case Z1 92 ATC 101; AAT Case 7541 (1992) 22 ATR 3549 where the applicant claimed a deduction for self-education expenses that led to her admission as a solicitor is similar to your circumstance. The Tribunal held the admission fees were of a capital nature and were, therefore, not an allowable deduction. The admission expenses secured the applicant a 'lasting advantage'.
In your case, the exams and study you undertook were a means of having your existing qualifications recognised in Australia. Such expenses provide you with a lasting benefit and are considered to be capital in nature. A deduction is therefore not allowable.