Income tax: if a taxpayer claims a deduction for self education expenses under subsection 51(1) of the Income Tax Assessment Act 1936, is the first $250 spent, but disallowed as a deduction under section 82A, excluded from the substantiation provisions?

Yes. The first $250 of self education expenses is not required to be substantiated by the taxpayer.

Under the substantiation provisions (section 82KZ), a taxpayer is only required to retain documentary evidence to substantiate work related expenses claimed as allowable deductions.

Even though the taxpayer is not required to substantiate the first $250 of self education expenses, the onus of proof still remains on the taxpayer to show (rather than substantiate) how the first $250 was expended. Example: A taxpayer spends $1500 in self education expenses. The first $250 is disallowed as a deduction under s82A. If the taxpayer claims $1250 as work related expenses , he/she must be able to substantiate $1250 with the necessary documentary evidence. Whilst there is no requirements to substantiate the first $250, the taxpayer must be able to provide a detailed explanation in regards to this expenditure.