FEDERAL BUDGET May 2021

PERSONAL TAXATION

Self-education expenses: $250 threshold to be removed

The Government will remove the exclusion of the first $250 of deductions for prescribed courses of education. The first $250 of a prescribed course of education expense is currently not deductible.

Background

A limitation on deductibility exists under s 82A of the Income Tax Assessment Act 1936 (ITAA 1936) regarding deductions that would otherwise be allowable under s 8-1 if the self-education expenses are necessarily incurred for or in connection with a course of education provided by a place of education (eg a school, uni, college, etc) and undertaken by the taxpayer for the purpose of gaining qualifications for use in the carrying on of a profession, business or trade or in the course of any employment.

In those circumstances, currently only the excess over $250 may be deductible.