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Edited version of your written advice
Authorisation Number: 1051451070288
Date of advice: 15 November 2018
Ruling
Subject: Self-education expenses.
Question
Can you claim your out of pocket self-education expenses?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
● You are an overseas citizen.
● You are an Australian resident.
● You are currently employed full time.
● You are eligible for a Commonwealth supported place at University.
● You are not eligible for Higher Education Contribution Scheme-Higher Education Loan Programme (HECS-HELP).
● You have a Diploma and X years post-graduate experience.
● You are planning to study various subjects.
● This degree will assist you to become registered in your field in the future and hold you in higher regard for more senior roles.
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 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 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 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 (Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348).
Similarly, 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, a deduction is allowable.
No deduction is allowable for self-education expenses if the study is designed to enable the taxpayer to get employment, to obtain new employment or to open up a new income earning activity, whether in business or in the taxpayer’s current employment. If the studies relate to a particular profession, occupation or field of employment in which you are not yet engaged, the expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income (FC of T v. Maddalena 71 ATC 4161; (1971) 2 ATR 541) (Maddalena’s case).
In your case, it is considered that your studies are not directly related to your current income earning activities and will be undertaken at a point too soon.