Self-education expenses allowed for 'part' of course

Self-education expenses generally are deductible when two elements are met. The first of which is that the expense is from a "prescribed course of education". The second element is that the intention of the education is to maintain or improve the skills and knowledge required in the taxpayer's current income-earning activities.

However, typically an expense is not allowable where the intention is for new employment or a new income-earning activity. This includes study in a field in which the taxpayer is not yet engaged. For example, a practicing general medical practitioner would not be allowed to claim self-education expenses for a dermatology course. This would not be allowable as the study is designed to open up a new income-earning activity as a specialist.

Relevant facts and circumstances

A recent ruling from the ATO has discovered that "not yet engaged" doesn't particularly mean an entire course of study. Relevantly, a deduction is allowable for individual units of study within a complete course if it can be shown that all other elements of the self-education rules apply.

In the ruling, an individual was employed to deliver an engineering course with an education institution. Part of the duties required the individual to undertake scholarly pursuits and obtain new knowledge in order to deliver this course.

The individual determined that completing a law degree course was adequate in performing their duties.

The ATO was able to acknowledge that parts of this degree had a sufficient connection with the knowledge required to teach the class they were engaged to teach. This included the courses "Legal Conflict Resolution", "Civil Obligations" and "Construction Law". The reasoning behind this was that sections of the teaching materials related to anti-discrimination, contract terms and project management, which were parts of the engineering course.

Therefore, the individual was able to claim a deduction for self-education for parts of the degree which, on a whole, may be considered the obtaining of new knowledge.


This poses an opportunity to go through a more stringent look for individuals and the tax payers ability to make a claim under D4 in the personal income tax return.

An individual's current working situation may not automatically allow a deduction for a course of study undertaken. However, close scrutiny of these courses may entitle them to a deduction for some of the costs involved.

Information sourced using CCH iknow