Reply: 2
From: Duncan M
>This may seem like a silly
>question to all who are
>experienced with
>Investing..but since becoming
>very interested in IP, I have
>spent a bit of money on books,
>education etc. Can I claim
>these expenses at year end,
>even though I have not yet
>purchased my first IP?
The deductions for 'self-education' are limited to those expenses that relate to your current income producing activities.
For example if you're a Plumber and you're doing an Computer Science degree then the costs are not deductible. If however you were doing a course on installing Hot Water Services then the costs would be deductible..
The relevant ATO link is:
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR989/nat/ato/00001
The relevant text from that link is:
12. Self-education expenses are deductible under section 8-1 where they have a relevant connection to the taxpayer's current income-earning activities.
13. If a taxpayer's income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of self-education enables the taxpayer to maintain or improve that skill or knowledge, the self-education expenses are allowable as a deduction.
14. If the study of a subject of self-education objectively leads to, or is likely to lead to, an increase in a taxpayer's income from his or her current income-earning activities in the future, the self-education expenses are allowable as a deduction.
15. No deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in the taxpayer's current employment). This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.
Hope this helps.. (seek professional advice as well
)
Duncan.
