Danny’s post last week spoke about spending up on your children’s education expenses to take advantage of the 50% rebate. We also get a lot of enquiry from clients about claiming their own education expenses, referring in particular to investment education.

There are a couple of things to be aware of, on that one. The first thing is that the first rule of claiming tax deductions is found in Section 8-1 of the ITAA 1997. The short version is that for the expense to be deductible, it needs to relate to your existing income.

So, learning about new ways of earning income doesn’t really fall under that description. According to the tax office, neither do courses for personal development, wealth psychology and general wealth creation seminars.

Education expenses that do relate specifically to your existing income streams (say, books and seminars about property management, accounting concepts for property, strategies for increasing rental returns, etc) will usually be much easier to claim.

Often, a course or product will explore a range of different concepts and it’s these that fall into more of a grey area. In some cases, you might be able to claim based on the portion that is relevant to you. For example, Positive Real Estate suggest that about 25% of their content is about accounting and depreciation ideas, and so that gives a basis for claiming at least part of their course fees. On the other hand, a book about vendor finance structures might not be deductible at all, for an investor who isn’t already wrapping properties before making that purchase.

With this in mind, developing your knowledge and abilities won’t always result in a deductible expense for you, but it’s always worth asking the question. The real benefit – often overlooked for the tax advantage – is going to be in your increased likelihood of making a profit, anyway!