One of the budget announcements this year was the limiting of self education deductions to $2,000pa, despite significant lobbying by numerous groups.
Basically, from 1 July 2014, this acts to deny any individual a deduction for costs incurred in relation to work related education and training beyond the first $2,000.
Consider the following example (extracted directly from the treasury discussion paper):In 2012‐13, Yanthe (a dental surgeon) paid for the following education related expenses:
|Annual dental conference (location: home town)
|Subscription to dental journals
As the total falls under the $2,000 cap, Yanthe can continue to claim all her work‐related education expenses.The next year, Yanthe decides to attend a 5‐day clinical conference to be held in Malaysia. All accommodation, meals and travel is included. The total cost of this conference is $15,000. It also counts towards continuing professional development requirements.
The application of this cap is quite extensive and incorporates education included as part of a salary sacrifice arrangement and also where professional subscriptions incorporate a training or education component.
Importantly it should be understood that this applies only to expenditure on personal training and education, meaning that where training is provided by an employer that is considered for the benefit of the business the cap will not apply.
If you would like to discuss the impact of these proposed rules further please contact Leigh Harry.