Edited version of private advice

Authorisation Number: 1051980422145

Date of advice: 16 May 2022

Ruling

Subject: Self-education expenses

Question 1

Are all the expenses incurred for the study of a Post Graduate Diploma in Global Project Management deductible as self-education expenses as per section 8-1 of the Incomes Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

No.

Question 2

Are part of your expenses incurred for the study of a Post Graduate Diploma in Global Project Management deductible as self-education expenses as per section 8-1 of the ITAA 1997?

Answer 2

Yes.

This ruling applies for the following periods:

Year ended 30 June 2021

Year ending 30 June 2022

The scheme commences on:

1 July 2020

Relevant facts and circumstances

You are employed part time as a Marketing and Events Coordinator.

You commenced study of Post Graduate Diploma in Global Project Management on XXXX.

The subjects you completed are as follows:

•                    Organisational behaviour and people management

•                    Sustainability project portfolio and program management

•                    Business decision analysis

•                    Innovation, creativity and entrepreneurship

•                    Marketing

•                    Businesses management and system

•                    Dynamic leadership

You incurred fees for the study and did not receive financial assistance from your employer.

You received a scholarship that assisted you with the payment of some of the course fees.

You completed the course.

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 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.

The Commissioner's view on the deductibility of self-education expenses is contained in Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses.

In accordance with TR 98/9, expenses of self-education will satisfy the requirements of section 8-1 of ITAA 1997 if:

•                    a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge, and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge (FC of T v. Finn (1961) 106 CLR 60;(1961 12 ATD 348) (Finn's Case); or

•                    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 their current income earning activities in the future (FC of T v. Hatchett (1971) 125 CLR 494; 71ATC 4184; (1971) 2ATR 557 (Hatchett's Case).

Therefore, provided there is sufficient connection between a course of self-education and current income earning activities, you are entitled to claim a deduction for your self-education expenses.

In determining whether a deduction is allowable in full for self-education expenses we have to examine the entire course as a whole in terms of the connection between the course and your income earning activities. If the course as a whole is considered to be relevant and incidental to your income earning activities, then the entire course would be deductible.

In your case, you are a Marketing and Events Coordinator that studied a Post Graduate Diploma in Global Project Management (the diploma).

The study of Post Graduate Diploma in Global Project Management is to refine and deepen understanding of strategic business developments and allows for you to commence working in the project management sector while you currently work in the marketing sector.

The study of the entire diploma does not have the relevant connection with the derivation of your assessable income to allow a deduction in full.

However, during the study of the diploma you completed a marketing subject. This subject has a direct connection to the derivation of your assessable income as a Marketing and Events Coordinator.

Accordingly, you are entitled to a deduction under section 8-1 ITAA 1997 for the expenses associated with the marketing subject of the diploma.

The self-education expenses you can deduct may be subject to a reduction of up to $250 in accordance with section 82A of the Income Tax Assessment Act 1936. Paragraph 119 to 155 of TR 98/9 provides an explanation of how this provision operates.