Edited version of private advice

Authorisation Number: 1052032291388

NOTICE

This edited version has been found to be misleading or incorrect. It does not represent the ATO's view of the relevant law.

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• the binding nature of the private advice issued to the applicant
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Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases.

Date of advice: 15 September 2022

Ruling

Subject: Deductions - self education expenses

Question

Are you entitled to a deduction for self-education expenses incurred for HECS-HELP Debt?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on

1 July 20XX

Relevant facts and circumstances

You are enrolled with XXXX University and completing your Masters in Business Administration.

You missed the cut off date for the university census date and so two of your courses were transferred to the Australian Taxation Office as a HECS HELP debt.

The two courses are;

•         MIS 770 Analytical Skills for Managers - XXXX University

•         MBA707 - The XXXX Advantage: Capstone

The amounts payable for these two courses are $X effective date of XX December 20XX and $X effective date of XX March 20XX totalling $X.

You have paid these amounts on XX April 20XX and XX May 20XX, before the indexation date.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 26-20

Detailed reasoning

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 or a provision prevents you from deducting it.

You cannot deduct a student contribution amount paid to a higher education provider under the Higher Education Support Act 2003: paragraph 26-20(1)(ca) of the ITAA 1997. Such payments are made by a student to cover the cost of a course of study at a tertiary educational institution. Repayment amounts for a HELP debt or a Student Financial Supplement Scheme (SFSS) debt are also not deductible: paragraph 26-20(1)(cb) and paragraph 26-20(1)(d) of the ITAA 1997.

Paragraph 122 of TR 98/9 confirms and explains that HECS fees payable for courses supported by the Commonwealth government under HECS (now known as HECS-HELP) are not an allowable deduction. This is so whether they are paid up front as a discounted amount or deferred for payment at a later date in an annual income tax assessment.

Application to your circumstances

To determine whether your self-education expenses are deductible, it is necessary to determine why the course fees arose. You missed the final cut-off date for the university census date and so two of your courses were transferred to the Australian Taxation Office as a HECS HELP debt totalling $X.

In your case you received HECS-HELP for the full amount of the student contribution charge and payment of that amount has been deferred under HECS-HELP. You are not entitled to a deduction for any payment to the Commonwealth to reduce your HECS HELP debt in relation to your student contribution amount.

Therefore, if your course fees come under the above schemes, you cannot claim the course fees for your studies as a self-education deduction under section 8-1 of the ITAA 1997, as it is specifically denied under section 26-20 of the ITAA 1997. This is the case regardless of whether the course fees are deferred or paid up-front.