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Edited version of private advice
Authorisation Number: 1051561322759
Date of advice: 5 August 2019
Ruling
Subject: Legal expenses deduction related to employment
Question
Are you entitled to claim a deduction for legal expenses incurred in defending allegations of breach of employment duties?
Answer
Yes. It is accept that the legal expenses you incurred were sufficiently connected to your employment duties. Accordingly, the legal expenses were incurred in gaining your assessable income and are deductible under section 8-1 of the Income Tax Assessment Act 1997.
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
During the relevant financial year, you were notified by your employer that you have been stood down pending investigation into not complying with employer's guidelines whilst performing your duties.
You were off work for several months on paid leave.
After one month of investigation the employer said that the allegations were founded and this was likely to lead to termination of your employment.
At a result you engaged the services of a solicitor to argue with the allegations and attend hearings.
Upon receipt of your solicitor's reply to the allegations and a meeting with your employer you were cleared from any wrong doing and your employment was not terminated.
You provided the amount you incurred in legal expenses in this matter.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
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