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

  • "Hi Adrian, Thank you for your book 101 ways to save money on your tax. It's very readable and well explained. Can I ask with direct care workers whose work is to visit clients in their home..."

    By: Aneeta Krishna at Jul 25, 2017 7:43AM

    Post: Claiming car expenses

  • "Hi my husband and I took out a line of credit recently from a current investment property to buy a new investment property but didn't use it all. can we use the rest to invest in shares? will it..."

    By: TF at Jul 25, 2017 5:42AM

    Post: Borrowing to buy shares

  • "I dstarted my own business in febuary 2017 I am running at a loss can my husband claim against his income as he has financed me for stock and equipment etc"

    By: Annette Maloney at Jul 24, 2017 7:53AM

    Post: Marriage

  • "I pay child support to my children's mother. Am I eligible to claim toll fees, sporting parking fees whilst they are in my care? Sometimes I pay registration fees for their sports which involve..."

    By: Chris at Jul 22, 2017 1:51AM

    Post: Claiming car expenses

  • "Wow, you've replied to so many people. I wish I could repay you in some way. Hugely appreciate you taking so much time to help unknowns. I work full-time, and study part-time. I travel from my..."

    By: Gaurav at Jul 20, 2017 7:23AM

    Post: Claiming car expenses