Edited version of private advice

Authorisation Number: 1052361375335

Date of advice: 07 March 2025

Ruling

Subject: Self-education expenses

Question 1

Are you entitled to a deduction for the self-education expenses under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the costs of undertaking a course?

Answer 1

Yes. Your self-education expenses are deductible under section 8-1 of the ITAA 1997. The expenses you incur to complete the course will allow you to improve the knowledge and skills required to carry out your current income-earning activities and are likely to lead to an increase in income from your employment. The course has the relevant connection to your income earning activities, and did not enable you to get employment, to obtain new employment or to open up a new income-earning activity. To claim a deduction for a work-related expense, you must have spent the money yourself and weren't reimbursed. Further information about self-education expenses can be found in Taxation Ruling TR 2024/3 Income tax: deductibility of self-education expenses incurred by an individual.

Note:If you cease employment at anytime during the course, your self-education expenses are not likely to be deductible.

This ruling applies for the following period:

DD MM YY

The scheme commenced on:

DD MM YY

Relevant facts and circumstances

On DD MM YY, you completed course A, to become qualified in your employment field.

On DD MM YY, you obtained registration in your employment field.

On DD MM YY, you started working at Employer 1. You were initially employed as a sole trader.

Your employer provided you with training, guidance and supervision during your employment.

On DD MM YY, you commenced full-time work at Employer 1, ceasing your work as a sole trader.

Throughout your employment with Employer 1, you discussed the benefits of undertaking specialty training.

On DD MM YY, you accepted a place in Course B.

You commenced Course B on DD MM YY.

On DD MM YY, when you started course B, you reduced your work hours from full-time to part-time Employer 1, due to the full-time study load.

You employer supports your decision to undertake the specialist Course B and has provided you with flexible working and study arrangements.

On DD MM YY, you signed a new employment contract with Employer 1 following pay negotiations.

The contract provided you with work at Employer 1 during and after your training. It specifies, "Ongoing from the signing date of this contract until completion of your specialist training program and then a commitment to work with the employer for a minimum of X years in the specialty field". This commitment of employment would be expected to commence from the beginning of DD MM YY - until the end of DD MM YY or beyond.

The contract specifies remuneration as a sessional rate and a commission rate.

The commission percentage set is XX% to XX% currently with capacity to increase in the future once course B is completed.

Following the completion of Course B and your registration as a specialist, you will be able to increase your workload, as your knowledge in the field increases.

The commission percentage is expected to increase once you are a registered specialist. In a letter, your employer has stated they will pay you the going specialist commission rate at that time in the future, which currently is XX%.

Course B mandates you to complete paid teaching sessions. You are currently employed at a casual basis with Employer 2 and Employer 3 (part of Course B).

You are undertaking the speciality Course B for the following reasons:

•                     It will maintain and improve your skill and knowledge at Employer 1,2 and 3.

•                     It will enable you to operate independently without specialised supervision at Employer 1.

•                     It will enable you manage a greater variety work of at Employer 1.

•                     It will likely increase your income.

Your position at Employer 1 after completion of Course B will remain the same, albeit you'll be a specialist. The nature of the work remains the same except the relationship is 'no longer under direction', but rather a mentor-mentee relationship.

The total fee for Course B is $XX.

You will also attend an annual industry program. The cost is $XX per year.

You are paying part of the course fees using FEE-HELP (Higher Education Loan Program). During year X of the course, FEE-HELP loan will be exhausted so you will be paying the remaining fees upfront.

You are not receiving any government allowance to study (including Abstudy, Austudy or Youth Allowance).

You are not receiving a taxable bonded scholarship.

You intend to complete Course B by DD MM YY.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1