Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

Where self education expenses are not deductable

Nov 16, 2010

In the case of Lloyd v Federal Commission of Taxation a taxpayer tried to argue that there was a perceived connection between the education expenses she had incurred while doing her PhD in Interactive Digital Media and Telecommunications and the increased income she received from her bank employer as a result of promotions.

Furthermore the taxpayer also tried to argue that there was a connection between the expenses claimed and the income she received in her later project administration and management roles with two other companies, and that these did not involve new income earning activities.

The Administrative Appeals Tribunal (AAT) found that perceived connection was not sufficient to justify the deduction. The AAT found that the taxpayer's purpose in undertaking employment was to support her study for her PhD, and her purpose in undertaking the PhD was to enhance and expand on her knowledge in the IT and telecommunications fields so that she could ultimately obtain more highly paid positions within that field.

Generally, you cannot claim a deduction for self-education expenses where the activity is:

  • Designed to result in new income earning activities as was the case above, or
  • Too general in nature. For example a manager who does a meditation course to improve her health and therefore her efficiency at work cannot claim this as a self-education expense.

You can however claim a deduction for expenses that you incur in activities that:

  • Maintain or improve the knowledge and/or skills that you exercise in your current income earning activities, such as a secretary undertaking an advanced word processing course because their current duties include extensive word processing, or
  • Are likely to lead to an increase in income from your current income earning activities such as a teacher studying a postgraduate education course to improve her chances of promotion.



Tags: Family

Author: Mr Taxman

Comments

"Nice post!"

By: Mark andrew on Dec 29, 2016 6:42PM

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "Are you in need of a loan? we offer all kinds of loan like Personal loans, Debt Consolidation Loan, Venture Capital, Business Loan, Educational Loan, Home Loan, and Loan for any reason and urgent..."

    By: ROSALES at Sep 26, 2018 8:00AM

    Post: Turn your small business into a big one

  • " Hello friends actually i will like to really take out time to comment about a testimony that took place in my life on how God directed me to a real loan lender who have transformed my life from..."

    By: owen david at Sep 26, 2018 5:25AM

    Post: Turn your small business into a big one

  • "Are you in need of a loan? we offer all kinds of loan like Personal loans, Debt Consolidation Loan, Venture Capital, Business Loan, Educational Loan, Home Loan, and Loan for any reason and urgent..."

    By: ROSALES at Sep 26, 2018 12:13AM

    Post: The secret to getting your loan approved

  • "Hello,i am Dr Harry Carlos, a private loan lender i give out loan to those that are in need of loan, and Those that want to start a new business.I give out Personal Loans, Business Loans, Student..."

    By: harry carlos loans at Sep 25, 2018 11:23PM

    Post: The secret to getting your loan approved

  • "Are you in need of a loan? we offer all kinds of loan like Personal loans, Debt Consolidation Loan, Venture Capital, Business Loan, Educational Loan, Home Loan, and Loan for any reason and urgent..."

    By: ROSALES at Sep 25, 2018 7:25AM

    Post: The secret to getting your loan approved