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Edited version of private advice
Authorisation Number: 1051668159643
Date of advice: 30 April 2020
Ruling
Subject: Legal expenses
Question
Are the legal expenses you incurred as per section 8-1 ofthe Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. The Commissioner considers that your situation is simular that that ofATO ID 2001/27 Income Tax Deductions and expenses: Legal expenses in course of employment.
ATO ID 2001/27 references Commissioner of Taxation v Day [2008] HCA 53, 2008 ATC 20-064, (2008) 70 ATR 14 (Day's case) where the courts accepted that legal expenses incurred in defending the manner in which a taxpayer performed his employment duties were allowable.
Your case is similar to that of both ATO ID 2001/27 and Day's case as you incurred legal expenses defending the manner in which you performed your employment duties.
This ruling applies for the following periods:
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
The scheme commences on:
1 July 2016
Relevant facts and circumstances
You were employed as a crowd controller.
You were involved in an incident at your workplace with a patron.
You subsequently charged with assault.
You engaged legal representation to defend the manner in which you performed your employment duties.
You maintained that you acted in self-defence.
If you were not at your place of employment performing your duties, you would not have been involved in the incident and therefore would not have been charged with assault.
Due to the legal action, your security licence was suspended and you were no longer able to work as a crowd controller.
You incurred legal expenses.
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