The controversial case of the taxpayer who claimed a loss on their home A decision by the Administrative Appeals Tribunal has the tax world in a flurry after the Tribunal found in favour of a taxpayer who sold the apartment she lived in for a loss, then claimed the $265,935 loss in her tax return as a deduction. In this case, the taxpayer successfully argued that the purchase and sale of the apartment was a short-term profit-making venture and that the loss generated from this could be claimed as a tax deduction. The tax rules generally allow you to deduct losses that relate to a commercial activity, although you cannot claim the loss if it is private or capital in nature. The taxpayer argued that she acquired the apartment in order to make a short-term profit and that the loss that was made on the sale should be deductible, even though she had lived in the property as her private residence across the ownership period. The Australian Taxation Office (ATO), as you can imagine, had a different point of view. The facts of the case were: July 2015 – The taxpayer lived in a large family home. When her husband passed away, she entered into an ‘off-the-plan’ contract to purchase an apartment intended to be completed by 30 June 2019. December 2016 – The taxpayer was notified that completion of the off-the-plan apartment was delayed until 30 June 2020. May 2018 – Taxpayer settles on the sale of her family home on advice from her real estate agent that it was a good time to sell. May 2018 – Taxpayer settled on another apartment, as a purchaser, in the same complex that had been completed. She had money from the sale of her family home that she could use, and only intended to keep the property for a short period of time as she needed to use the funds to settle the off-the-plan apartment. Her position was that it was an opportunity to make a profit. April 2020 – The taxpayer entered into a contract to sell the apartment at a loss during the first COVID lockdown. July 2020 – Settlement on sale of the apartment occurred. July 2020 – The purchase of the off-the-plan apartment completed and was settled. A substantial portion of the proceeds of the sale of the other apartment, and some of the proceeds of the sale of the family home, were used to settle the off-the-plan apartment. The Tax Commissioner’s position was that someone approaching the opportunity in a business-like manner as a profit-making venture would not live in the apartment and would have waited to sell if the market was not favourable. The Tribunal set a low bar for proof of a profit-making intention and found that the fact that the taxpayer lived in the property was secondary to her profit-making intent. The reason why this case is controversial is not simply because of the loss claimed by one taxpayer. It is because of the broader implications to property owners if the ATO determines that a transaction is commercial in nature and taxes any profit as ordinary income rather than under the Capital Gains Tax (CGT) provisions. For example, if the taxpayer in this case had made a profit instead of a loss, she would have paid tax on the profit at her marginal tax rate. She would not have been able to apply the main residence exemption or the CGT discount. One of the important things to take from this case is that living in a property doesn’t necessarily guarantee that the sale of the property will be taxed under the CGT rules or will qualify for the main residence exemption. For example, property ‘flippers’ who buy and renovate a house may face a significant personal tax bill on any gain they make with no access to the concessions that exist within the CGT rules. It will be some time before we know the full implications of this case and the ATO is yet to confirm whether it will appeal the decision. Either way, determining whether a transaction is taxed on revenue or capital account can be a complex process and it is important to seek advice before entering into transactions involving property. How to contact us It's important to speak to a financial professional before taking any action. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

Protect Your Assets: Considerations Before Redrawing Investment Loans The ATO estimates that incorrect reporting of rental property income and expenses is costing around $1 billion each year in forgone tax revenue. A big part of the problem is how taxpayers are claiming interest on their investment property loans. We’ve seen an uptick in ATO activity focussing on refinanced or redrawn loans. This activity is a result of a major data matching program of residential property loan data from financial institutions from 2021-22 to 2025-26. This data is being matched to what taxpayers have claimed on their tax returns. Those with anomalies can expect contact from the ATO to explain the discrepancy. If you have an investment property loan and redraw on the loan for a different purpose to the original borrowing, the loan account becomes a mixed purpose account. Interest accruing on mixed purpose accounts need to be apportioned between each of the different purposes the money was used for. On the other hand, if the redrawn funds are used to produce investment income, then the interest on this portion of the loan should be deductible. For example, if you have redrawn on the loan to pay for a private holiday, or pay down personal debt, then the interest relating to this portion of the loan balance is not deductible. Not only will the interest expenses need to be apportioned into deductible and non-deductible parts, but repayments will normally need to be apportioned too. Withdrawals from an offset account are treated as savings rather than a new borrowing. If you have a loan account and an interest offset account is attached to this account that reduces the interest payable on the loan, withdrawing funds from the offset account will typically increase the amount of interest accruing on the loan, but won’t change the deductible percentage of the interest expenses. That is, when you withdraw funds from the offset account this is really a withdrawal of savings and won’t impact on the extent to which interest accruing on the loan account is deductible. If you have a home loan that was used to acquire your private home and you have funds sitting in an offset account, withdrawing those funds to pay the deposit on a rental property won’t enable you to claim any of the interest accruing on the home loan. However, if you redraw funds from the home loan to acquire a rental property then interest accruing on this portion of the loan should be deductible. The tax treatment always depends on how the arrangement is structured. Think you might have a problem? Contact us and we can investigate the issue before the ATO contact you. Ballina or Byron Bay 02 6686 3000.

Uncertainty has reigned over the last few years, but can we expect more consistency as we head into 2024? We explore some of the key issues and influences. Inflation and labour supply RBA Governor Michelle Bullock stated, “Inflation is past its peak and heading in the right direction, but it is likely to return to target a bit more slowly than we previously thought.” While there have been encouraging signs, uncertainty remains. Domestically, inflation is persistent, growth has slowed but the labour market remains tight. And, the Australian economy remains at risk with uncertainty over the Chinese economy and ongoing international conflicts. At this stage, the RBA have not ruled out further interest rate increases. The unemployment rate remains at 3.7% and the labour market tight. Wages grew 1.3% for the September 2023 quarter and 4.0% over the year, pushing wages to a 14 year high. High-skilled workers are particularly difficult to source, and we appear to have reached a point now where employers are unwilling to pay inflated salaries to acquire those willing to move. Income tax cuts and the end of some concessions From 1 July 2024, the stage 3 tax cuts that radically simplify the personal income tax brackets come into effect. The tax cuts collapse the 32.5% and 37% tax brackets into a single 30% rate for those earning between $45,001 and $200,000 – this is assuming the May Federal Budget does not postpone or scrap them! The superannuation guarantee rate will rise again on 1 July 2024 to 11.5%. For small and medium businesses with group turnover of less than $50m, a series of concessions are set to end or reduce back to conventional levels: The Skills and Training Boost ends on 30 June 2024. The boost provides a bonus deduction equal to 20% of eligible expenditure for external training provided to your workers for costs incurred between 29 March 2022 and 30 June 2024. The Small Business Energy Incentive is scheduled to end on 30 June 2024, although legislation to introduce this concession still hasn’t passed through Parliament. The incentive is intended to provide an additional 20% deduction on the cost of eligible depreciating assets that support electrification and more efficient use of energy. The instant asset write-off for businesses with group turnover of less than $10m is due to reduce back to $1,000 from 1 July 2024. The cost threshold is meant to be $20,000 for the 2024 financial year, but legislation relating to this measure hasn’t passed through Parliament yet. Worker rights and rewards There have been a myriad of changes and enhancements to workplace laws across 2023 and employers can expect greater scrutiny in 2024: A 5.75% increase in the minimum wage to $23.23 per hour from 1 July 2023. New rules and a 2 year limit to some fixed term employment contracts (no renewing). A landmark case that defined how to determine whether a worker is a contractor or employee. The ATO has followed through with new rulings to ensure employers are paying the correct entitlements. It’s essential that employers have assessed contractors to ensure that they are classified correctly. Greater flexibility for unpaid parental leave. How to contact us It's important to speak to a financial professional before taking any action. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

Legislation enabling an extra 15% tax on earnings on super balances above $3m is before Parliament. While not a concern for the average worker, if enacted, those with significant property or other illiquid assets in their superannuation fund are most at risk, for example farmers and business operators who own their business property in their self managed superannuation fund (SMSF). The issue is how the tax is calculated. The tax captures the growth in the balance of a member’s superannuation over the financial year (allowing for contributions and withdrawals). It captures both: Realised gains from the sale of assets, and Unrealised gains triggered by an increase in the value of superannuation assets. For example, if the value of a property increases. If the member’s total super balance has decreased — the loss can be offset against future years. The ATO will calculate the tax each year. Members with balances in excess of $3 million will be tested for the first time on 30 June 2026, with the first notice of assessment expected to be issued to those impacted in the 2026-27 financial year. If you are likely to be impacted by the impending new tax, it is important to speak to your financial adviser. While keeping assets within superannuation will remain the best option for many from a tax and planning perspective, it’s important to ensure that you’re in the best possible position. How to contact us It's important to speak to a financial professional before taking any action. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

Christopher Atkinson, CEO at Collins Hume, shares a big thank you for your support through our recent changes. We appreciate your understanding and value your trust in our commitment to delivering top-notch services. Get ready for 2024! We're thrilled to announce a new service for our business clients, offering valuable tools for business and lifestyle success. Stay tuned for updates! Wishing you a Merry Christmas and a successful holiday season. Our offices will be closed from 22 December 2023 to 2 January 2024. Cheers to a fantastic year ahead from all the Collins Hume team! 🎉🎄

In the intricate world of finance, where decisions can carry lasting consequences, individuals and businesses seek a guide they can trust. Introducing Colby Atkinson, a Financial Advisor at Essential Wealth and Retirement (EWAR), armed with an extensive background and a genuine commitment to his clients' financial well-being. Colby's transition from a Physiotherapy Degree to Financial Planning was not merely a career shift; it was a conscious choice driven by passion and purpose. During university, he discovered his affinity for Financial Planning, realising that he wanted to help individuals attain financial freedom earlier, offering choices beyond a life of relentless work. In his current role at EWAR, Colby's routine involves conducting initial discovery appointments. These sessions delve into clients’ current financial situations, their goals and any gaps that are identified are filled with tailored strategy options. The second meeting in the advice process is conducted after extensive research and the client receives all of their recommendations. “What sets EWAR apart is our commitment to doing the heavy lifting for our clients and ensuring the seamless implementation of recommendations, whilst providing accountability through regular reviews,” says Colby. He also notes an innovative approach and collaborative spirit among EWAR staff. “EWAR is not just an employer but an organisation that nurtures individuals into financial planners, fostering a culture of hard work and career enjoyment.” Colby's strengths lie in his exceptional listening skills and effective communication, prioritising transparency and setting clear client expectations. His ability to relate to diverse individuals, from young accumulators, family groups, pre-retirees and retirees, is a testament to his adaptability. His specialties include cash flow, personal investment planning, superannuation, personal risk insurance and estate planning. Outside his financial planning world, Colby is a sports enthusiast, equally passionate about playing and watching various codes. As such, he’s a handy member to have on any trivia team covering the sporting question round! Colby's collaboration with Collins Hume adds another layer to his professional journey. The partnership aims to identify clients in need of financial planning advice and facilitate meetings to explore how EWAR can provide valuable solutions. In the tapestry of financial advising, Colby Atkinson emerges not just as an advisor but as a dedicated partner. His passion, expertise and commitment to client satisfaction make him stand out in the financial planning landscape for those seeking financial freedom. Colby is based in Collins Hume's Ballina office every Thursday. To make an appointment, please call us on 02 6686 3000 or ask your Collins Hume Accountant to set up a meeting or email Colby at EWAR. Colby's journey into Financial Planning began with a Bachelor of Commerce majoring in Financial Planning and Accounting from Griffith University. Eager to deepen his knowledge, he completed a Certificate IV in Finance & Mortgage Broking from AAMC Training Group, an Advanced Diploma in Financial Planning from Monarch Institute and a Financial Planning Diploma from the International Institute of Technology. From being a Financial Advisor at Wealthmed Australia to a Private Wealth Manager at MedCapital - Financial Services for Doctors, Colby's experience spans different facets of the Financial Planning sector. His previous role as Financial Advisor at Future Assist where he worked with everyone from mum and dad investors to high net wealth individuals, underlines his versatility.

A Journey of Hope, Friendship and Sun-Safe Awareness In a remarkable display of resilience, determination and community spirit, Collins Hume Senior Accountant Marisa Worling has successfully raised $8,860 in her recent Melanoma Walk Fundraiser. With the fundraising campaign open until the end of December, Marisa is optimistic about reaching her $10,000 goal, driven by a passion to make a difference in the fight against melanoma. One of the standout moments in Marisa's journey was her arrival at Lakes Entrance, a day she fondly describes as a highlight. Visiting St Brendans Public School, Marisa and her fellow walkers received a warm welcome from students, who actively engaged in discussions about the importance of sun safety. This interaction not only strengthened the cause but also emphasised the significance of spreading awareness about sun safety from a young age. Throughout the walk, Marisa and her team made stops at various schools, creating an open dialogue about the dangers of melanoma and promoting sun-safe practices. The response from students was overwhelmingly positive, reflecting the potential impact of such initiatives on future generations. The camaraderie among the fundraising team was a driving force behind their success. Lifelong friendships were forged, making the journey a rollercoaster of emotions. Amidst the sadness of hearing numerous stories of loved ones lost to melanoma, there was a prevailing sense of hope. Marisa, in particular, became a beacon of inspiration, with many expressing how her story resonated and motivated them to make positive changes in their lives. The walk was not without its challenges, as some participants faced injuries along the way. However, the strength of the walkers was evident as they rallied together, providing support and encouragement to ensure everyone crossed the finish line on the last day. This collective effort added a special and meaningful dimension to the entire experience. As the fundraising campaign continues, Marisa remains committed to making a lasting impact in the fight against melanoma. Her journey, marked by heartfelt interactions with supporters along the 621km route, the creation of enduring friendships, and the triumph over physical challenges, serves as testament to the strength of community and the potential for positive change through collective action. To support Marisa's cause and contribute to Jay’s Mission Melanoma Walk fundraiser, donations can still be made until the end of December. Every contribution brings Marisa one step closer to her $10,000 goal and helps raise awareness about the importance of sun safety in preventing melanoma.

In life, many of us are totally at ease and comfortable talking to our family and friends about many topics. However, for whatever reason, there are certain subjects that we’re either reluctant or feel uneasy to discuss openly – typically they are love and relationships, politics, religion and money … call them the “taboo topics”. Add another taboo topic to the list. That is the topic of ageing. As we age and reach our elderly years, asking for some help to do things to make life easier can be really hard to bring up in conversation. When families get together, there are things we just notice but we’re reluctant to say anything. We notice that Dad might be starting to forget things or Mum is having difficulty getting out of her chair and seems a bit uneasy on her feet. Any attempt to say something is usually met either in silence or the words “I’m okay, just getting older” are uttered. And for many families that’s where things are left. Then there’s a crisis … Families are then drawn together when there’s been a crisis such as a fall or a hospital admission. Then discussions and decisions are usually being made under high stress and emotion in hospital hallways and carparks. This is not an optimal starting point. Making decisions and what’s the trade-off … Like other life decisions, when it comes to ageing decisions, some are relatively simple to make with minimal consequences, whilst others can be very difficult. When making decisions, there are usually “trade-offs” to be considered. The impact of these trade-offs usually increases as the importance of the decision increases. Therefore, to make the best possible decision, it’s important to consider as many options as humanly possible. So what needs to be thought about … When it comes to ageing and getting some help there are usually many options to consider and everyone is different. For instance, when getting some help in the home, exactly what help is required and possible now and into the future, who will provide the help and at what cost? If moving into an aged care facility, what care will be required, where will the new home be, what to do with the family home, and how to pay for this are all decisions that need to be made and there are usually many options to consider. So how do families identify these options and make appropriate decisions? Where do you start? What questions do you ask and who to? Are the answers you get back in your best interest … or someone else’s? What needs to be done and when? What happens if there’s a problem? How Family Aged Care Advocates fit in FACA provides guidance and support to help families identify the relevant options to help you make informed decisions to get the best care outcomes for the people you love and care for most. They're independent aged care specialists only interested in the right outcomes for your family … that’s all that matters and there’s no trade-off with that.

Pay secrecy, job ads and flexible work amendments From 6 December 2023, employers can no longer employ an employee on a fixed-term contract that: is for 2 or more years (including extensions) may be extended more than once, or is a new contract: that is for the same or a substantially similar role as previous contracts with substantial continuity of the employment relationship between the end of the previous contract and the new contract, and either: the total period of the contracts is 2 or more years, the new contract can be renewed or extended, or a previous contract was extended. The changes were introduced as part of the Pay secrecy, job ads and flexible work amendments. See the Fair Work Ombudsman’s website for more details. How to contact us It's important to speak to a financial professional before taking any action. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

Up to 10 years in prison for deliberate ‘wage theft’ Legislation currently being debated in Parliament will introduce a new criminal offence for intentional “wage theft”. If enacted, in addition to the criminal offence, a fine will apply. The fine is three times the underpayment and: For individuals - 5,000 penalty units (currently $1,565,000). For businesses - 25,000 penalty units (currently $7,825,000). The reforms are not intended to capture unintentional mistakes and a compliance ‘safe harbour’ will be introduced by the Fair Work Ombudsman for small businesses. In addition to addressing wage theft, the Bill also seeks to: Replace the definition of a ‘casual employee’ and create a pathway to permanent work. Change the test for ‘sham contracting’ from a test of ‘recklessness’ to ‘reasonableness.’ Bolster the powers of the Fair Work Commission including the ability to set minimum standards for ‘employee-like’ workers including those in the gig economy. Introduce a new offence of “industrial manslaughter” in the Work Health and Safety Act 2011. The Bill introducing the reforms has been referred to the Senate Education and Employment Legislation Committee. The Committee is scheduled to report back in February 2024. “Wage-theft” is illegal in Queensland, South Australia and Victoria under State laws. While the Federal Bill is not intended to interfere with State legislation, the impact of the interaction between the existing State legislation and the proposed Federal reforms is unclear. Over the last two years, the Fair Work Ombudsman has recovered over $1 billion in back payments, mostly from large corporates and universities. Court-ordered penalties of $6.4 million were paid by employers across this same time period. How to contact us It's important to speak to a financial professional before taking any action. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000.

Property investors who choose to utilise their property for short-term stays (or leave it vacant) are firmly in the sights of the regulators. The Victorian Government’s recent Housing Statement announced Australia’s first short-stay property tax. The additional tax, which is scheduled to come into effect from 1 January 2025, is expected to generate $70 million-plus annually. The Short Stay Levy will be set at 7.5% of the short stay accommodation platforms’ revenue – so, a few days in Melbourne at $850 will cost an extra $63.75 taking the stay to $913.75. According to the statement, there are more than 36,000 short-stay accommodation places - with almost half of these in regional Victoria. More than 29,000 of those places are entire homes. Airbnb’s ANZ Country Manager Susan Wheeldon however says that “short-term rentals in Victoria make up less than one percent of total housing stock. Acute housing issues existed long before the founding of Airbnb, and targeting these properties is not a long-term solution.” Property investors are now braced for an onslaught of similar taxes at either the local Government or State level. For Victorian investment property owners this comes after a temporary land tax surcharge from the 2024 land tax year and for those keeping a property vacant, an increase to the absentee owner surcharge rate from 2% to 4% including a reduction in the tax-free threshold from $300,000 to $50,000 (for non-trust absentee owners). Some local Government taxes on Airbnb-style accommodation will be removed once the new tax comes into effect. Some Councils already impose a surcharge on short-stay accommodation. Brisbane City Council for example imposed a 50% rate surcharge on properties listed for short-term rental for more than 60 days a year in their 2022-23 Budget, only to increase it to 65% in 2023-24. What happens overseas? Bed taxes in some form are not uncommon internationally but it is unusual to isolate one form of tourist accommodation from another as the Victorian Government has chosen to do. Also unusual is the 7.5% rate – many local taxes on short-stay accommodation are in the 5% range (despite California’s Transient Occupancy Tax of up to 15% depending on the region you are staying). Globally, the idea of taxing vacant and short-term accommodation is also not new. In British Columbia, the Underused Housing Tax - a 1% tax on the ownership of vacant or underused housing introduced from 1 January 2022 - has been credited with increasing the rental stock by up to 20,000 properties. Taking the alternative route to freeing up rental stock, New York introduced new rules in September 2023 that severely restrict Airbnb-style accommodation options. Hosts need to register with the city if they offer accommodation for less than 30 consecutive days (unless their building is exempt as a hotel or accommodation establishment). Under the new rules, the host must permanently reside in the property - entire properties will no longer be available - and, only two guests are allowed. The platforms are responsible for monitoring and enforcing compliance with the new rules. New York is not alone in curbing the rise of short-term rentals. Amsterdam, Paris and San Francisco limit the number of days in a year an entire residence can be listed – between 30 and 90 days. Closer to home in Byron Bay, the Byron Bay Council will limit “non-hosted holiday letting to 60 days per year for most of the Shire” from 23 September 2024. But do restrictions on Airbnb create rental stock? According to Professor Nicole Gurran, from the University of Sydney’s School of Architecture, Design and Planning, if Australia is serious about controlling short-term rentals to solve Australia’s long-term rental crisis, then more needs to be done. “In comparison to much of the international regulation of the short-term rental market, Australia is very “light touch”. The overarching aim is to encourage the tourism economy. While this might have been appropriate five years ago when the rental market was in better shape, and long-term housing demand focused on inner city areas, the current crisis demands a new approach. Regulations must be tailored to the conditions of local housing markets, rather than the one-size-fits-all approach that exists today,” Professor Gurran says. In a 2017 study, Professor Gurran and Professor Peter Phibbs found that Airbnb absorbed 7% of stock in one Sydney municipality. So, where is all this going? Governments are unlikely not to take advantage of the opportunity to share in what has become a lucrative short-term rental market. What that looks like will really depend on the States and Territories. Beyond revenue, further regulation is likely to ensure that private gain from short-term rentals is not at the expense of supply of long-term accommodation.

What can you claim? The Australian Taxation Office has released a new draft ruling on self-education expenses. We revisit the deductibility of self-education expenses and what you can and can’t claim. If you undertake study that is connected to your work you can normally claim your costs of that study as a tax deduction - assuming your employer has not already picked up your expenses. There is also no limit to the value of the deduction you can claim. While this all sounds great and very encouraging there are still issues to consider before claiming your Harvard graduate degree, accommodation, and flights as a self-education expense. Clients are often surprised by what cannot be claimed. Self-education expenses are not deductible if you are undertaking the education to obtain a new job or something not connected to how you earn your income now. Take the example of a nurse’s aide who attendees university to qualify as a registered nurse. The university degree and the expenses associated with degree are not deductible as the nursing degree is not sufficiently connected to their current role as a nurse’s aide. The ATO has recently released a new draft ruling on self-education expenses. While the ruling does not introduce new rules, it does reinforce what the ATO will accept…and what they won’t. Personal development courses While not always the case, one of the key challenges in claiming deductions for self-development or personal development courses is that the knowledge or skills gained are often too general. Take the example of a manager who is having difficulty coping with work because of a stressful family situation. She pays for and attends a 4-week stress management course. In that case, the stress management course is not deductible because the course was not designed to maintain or increase the skills or specific knowledge required in her current position. When your employment ends part the way through your course If your employment (or your income-earning activity) ends part the way through completing a course, your expenses are only deductible up to the point that you stopped work. Anything from that point forward is not deductible (that is until you obtain a new role and assuming the course remains relevant). Overseas trips with some work thrown in Overseas study tours are deductible in limited circumstances. If you are travelling overseas, you need to prove that the dominant purpose of the trip is related to how you earn your income. Factors that help demonstrate this include the time devoted to the advancement of your work-related knowledge, the trip not being merely recreational, and that the trip was requested by or supported by your employer. The ATO are strict on this. Take the example of a senior lecturer in history at a University. He takes a trip to China with his wife while on leave over the Christmas break to update his knowledge on his area of academic interest. While his job does not require him to undertake research, he incorporated some of the 600 photos he took and some of the learnings from the tour into the courses he teaches. Despite having a relationship to work, the trip is not deductible as, while relevant in some ways to his field of activity, it is incidental to the overall private and recreational nature of the trip. Overseas conference with some recreation thrown in We’ve all had them. Conferences where you spend a few days in sessions and then a day (or more) of touring or golf. When the dominant purpose of the trip is related directly to your work, then the ATO are more accommodating. If the leisure time, for example an afternoon tour organised by the conference, is incidental to the conference itself, then you can claim the full conference expenses. Where you are extending your stay beyond the conference dates and this isn’t considered incidental, then you apportion the expenses and only claim the portion related to the conference. Let’s say you attend a conference for four days, then spend another four days on holiday. Assuming the conference is directly related to your work, you can claim your expenses related to the conference (assuming they were not picked up by your employer), and half of your airfare (as it’s a 50/50 split on how you spent your time between the conference and recreation). Not fully deductible? Part of the course might qualify If a particular course is not entirely deductible, a deduction may still be available for some of the course fees where there are particular subjects or modules in that course that are sufficiently related to your employment or income-earning activities. In these cases, the course fees would be apportioned. Take the example of a civil engineer who is completing her MBA. While the MBA itself may not have a sufficient connection to her engineering role to be fully deductible, her expenses related to the project management subject she took as part of the degree could qualify. Interaction with government assistance If your course is a Commonwealth supported place, you cannot claim the course fees. But, the deductibility of course fees are not impacted merely because you borrow money to pay for those fees, for example a full-fee paying student using a government FEE-HELP loan to pay for course fees. A warning on large claims There is no limit on the amount you can claim as a self-education expense but the ATO is more likely to target large self-education expenses. For anyone who has completed post-graduate study you know that these expenses can ratchet up very quickly, particularly when you add in any other expenses such as books or travel. It’s important to ensure that there is a clear connection between your current job or business activity and the self-education expenses before you claim them. Airfares incurred to participate in self-education, provided you are not living at the location of the self-education activity, are deductible. Airfares are part of the cost of undertaking the self-education activities. How to contact us It's important to speak to a financial professional before taking any action on tax deductions. Contact Collins Hume Accountants & Business Advisers in Ballina or Byron Bay on 02 6686 3000 Read more tax planning topics here » Access our free tax factsheets here »