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25 May 09 Self-education expenses disallowed - Yan

The AAT has held that expenses incurred in study toward a Masters of Applied Commerce and a Graduate Certificate of Wealth Management, undertaken while the taxpayer was employed as an accounts manager and personal assistant, were not deductible under s 8-1 ITAA 1997.

The taxpayer had claimed for part of the cost of studying four subjects out of six actually studied in the course of seeking to obtain the Master's degree and Certificate on the basis that some subjects and some topics within some subjects were relevant to her employment. She enrolled in the degree course some time before taking up her employment. Her employer gave evidence that the course of study was not a requirement of her employment, was not a significant factor in gaining employment and did not lead to any increase of income.

The AAT held that the expenditure was incurred to enable the taxpayer to obtain two new forms of qualification to better suit her to obtain a new and different income earning activity. In the AAT's view it is necessary to look at the purpose of the study as a whole and not seek to apportion a part of a cost in an effort to relate some part of the course of study to income earning activities. In this case, the AAT was satisfied that the costs incurred were to obtain the additional qualification to enable the taxpayer to obtain different and more highly paid employment which, in fact, she was subsequently able to do. The expenses were not deductible: Re Yan and FCT [2009] AATA 377 (AAT, B H Pascoe Senior Member, 22 May 2009).

For a copy of the decision go here.

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