Edited version of your written advice

Authorisation Number: 4130048146999

Date of advice: 31 July 2018

Ruling

Subject: Self education expenses

Question

Are you entitled to a deduction for self-education expenses for an MBA course?

Answer

Yes, you are entitled to a deduction for self-education expenses for your MBA course, in accordance with Taxation Ruling TR98/9, which provides that a deduction is allowed 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 improve that skill or knowledge.

Additional information

In certain circumstances you may have to reduce your allowable self-education expenses by $250. However you may have other types of expenses some of which are not allowable as a deduction that can be offset against the $250 before you reduce the amount you can claim for allowable expenses.

For more information on how to work out your self-education expenses, search for Quick Code (QC) 31970 at ato.gov.au.

This ruling applies for the following period:

Year ending 30 June 20XX.

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You have worked for your current employer for 3 months, and are employed on a fulltime basis as a Human Resource Manager.

You were previously employed as a HR manager at another company.

You have paid all the MBA fees yourself, and have not been reimbursed for any fees, and you have not been given any study days or time off work for your MBA. You are studying the course fulltime.

You commenced the course 11 months ago, and will complete it in 5 more months.

When you enrolled in the MBA course you were employed as a HR manager by your previous employer.

The MBA is not a requirement of your current role; however it has helped you improve the specific skills and knowledge that you need for your current role as a HR manager.

You intend to stay with your employer on completion of the MBA.

As a HR Manager it has been important for you to be able to enhance your knowledge of the management side of a business to better offer strategic advice and understand how the business operates in a rapidly changing environment. The things that you have learned in the MBA have directly improved the skills you need to know to conduct your job as a Human Resources Manager.

Once you graduate from the MBA you expect to see an increase in your income due to the increased breadth and depth of your knowledge.

The modules you are studying include Management Finance, Values Ethics and Diversity in Organisations, Corporate Governance, Responsible Leadership, Personal and Professional Skills and development, Organisational Analysis, Financial and management Accounting, and Board Room Simulation.

These modules have enabled you to improve the following skills or knowledge in your performance of your existing duties:

Your current role as a HR Manager working in your organisation has involved a number of mergers and acquisitions. This subject of Management finance has given you a better understanding and improved your skills in managing these mergers and acquisitions from a holistic organisational perspective. The subject has looked at things such as: interpreting and communicating financial information effectively, knowledge of management finance theory, concepts ad models and demonstrate capability to analyse the issues involved in valuation, mergers and acquisitions.

It has developed your ability to re-frame organisational practices (such as hiring, remuneration, and even performance management) and to include ethical considerations in the above decisions.

This has allowed you to improve your current HR Management and leadership skills through the lens of theoretical frameworks, contrasted with a reflection of your own management practices. As you currently lead a team of HR Administrators, this has greatly improved your leadership capabilities for people management.

Personal and core professional management and leadership skills are ones that you use in your everyday professional life as a HR Manager.

Organisational Analysis was used to understand and analyse the current thinking on organisational design, structuring and change approaches. You have used the ideas and concepts extensively in your current role as a HR Manager. This is due to constant organisational restructures, mergers and acquisitions and environmental changes.

The organisation you currently work for as a HR Manager is an ASX listed organisation. Financial and Management accounting has been particularly important in better understanding accountability expectations of publicly listed companies and shareholders. With the Management side of accounting you have learnt how to prepare reports such as budgets and remuneration reports – which are an important aspect of your current role as a HR Manager in your HR department.

In the Board Room simulation module your involvement was as the HR Director of a fake start-up computer manufacturing company. You had to set up the HR strategy (where to open offices, how many people to hire, how much to pay them etc) and run it through sophisticated business simulation software.

The Board of Directors used by the university for the simulation were all esteemed members of the business community in your city.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1936 Section 82A