Clients sometimes ask if they can claim a tax deduction for the cost of online training courses, attending seminars and workshops etc in relation to learning about investment, for example share market or options trading, making money and property investment.

Generally, an income tax deduction for investment related expenses incurred must have a direct connection to the generation of EXISTING assessable income. For example, if you have incurred an expense that is related to your investment property, then to be able to claim this as an income tax deduction you must have already owned the property before incurring the expense (in this case the cost of a property investment course/seminar), and you must also already be generating assessable income from that investment. In other words, if the expense is incurred to generate assessable income, then you can claim the expense as a deduction against that income as there is a direct nexus.

In all other cases the expense is capital in nature (incurred prior to assessable income being generated or prior to the property being acquired), or is not related to generating assessable income and IS NOT an allowable deduction. It will be a capital cost and may be included in the arriving at capital gains.

Investment property expenses incurred during the construction period is a little different. A court case decided there is sufficient connection to the income earning activity, even though it was yet “available” for rent. See my post on this topic here:

Investment Property Deductions