Fee-HELP and Deductibility of Course Fees
If you are studying a course relating to your current employment and you defer payment of the fees by using Fee-HELP will the fees still be deductible even though you do not pay it upfront?
ATO ID 2005/26 states:
“Even though the taxpayer has obtained a loan for all or part of the fees for the course under FEE-HELP, this does not preclude the taxpayer from claiming a deduction for the expenses incurred in relation to the course.”
Bart is a registered tax agent and is doing a Masters in Tax course and decides to use Fee-HELP to defer payment of the course because he is low on funds at the moment. So he enrols and incurs the debt of $10,000 for his subjects. He can claim a $10,000 deduction, save about $3,000 in tax, and not have to directly pay for the course until many years later when his taxable income rises above the repayment threshold – which is $51,957 in the 2018-19 tax year.
ATO ID 2005/26
See also these recent private rulings:
Authorisation Number: 1051472588169
Authorisation Number: 1051479369722
Authorisation Number: 1051479812479
Authorisation Number: 5010056303358