Self-education expenses - The ATO's latest target

The Australian Taxation Office (ATO) has just released its latest draft ruling, TR 2023/D1, focused on the intriguing world of deductions for self-education expenses. This ruling takes the stage, replacing the seasoned TR 92/8 and TR 98/9, which have gracefully retired.

So, what else have they announced? The ATO has taken this opportunity to ramp up its guidance. Now, they're diving deep into the details, fuelled by the latest courtroom wisdom. This means we now have a clearer understanding when it comes to figuring out which self-education expenses are tax-deductible.

Here are the highlights:

  1. Why the ATO has brought about this draft ruling: Claiming deductions for self-development or personal development courses has often felt like navigating a complex maze. These deductions can be a challenge, especially when the knowledge gained is broad and general.
  2. Income cessation: If you quit your job or income-earning activities during a course, don't worry; deductions are still on the table. However, they only apply to expenses incurred up until your income ceases.
  3. Partial deductions: Even if a particular course doesn't qualify for a full deduction, some course fees could still be tax-deductible if they're closely related to your job or income-earning pursuits. It might require a bit of fee-fraction reassessment.
  4. Fee type distinctions: Remember, it's crucial to distinguish between course fees for full fee-paying spots and Commonwealth-supported places. Deductions are like VIP passes - they don't apply to Commonwealth-supported course fees.
  5. Loan consideration: If you've looked to loans to cover those course fees, you're still in the clear. The ATO even provides a real-life example of a student using a FEE-HELP loan. Remember, deductions don't extend to covering the borrowed principal or government loan indexation.

This draft ruling is your treasure map to deduction clarity, giving individuals and businesses a guiding light in the complex world of self-education expenses.

Are you ready to navigate your education expenses with more precision and confidence? 

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