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Edited version of private advice
Authorisation Number: 1051931528687
Date of advice: 10 December 2021
Ruling
Subject: Capital gains tax
Question
Are you entitled to a deduction for legal expenses to defend the termination of your employment?
Answer
Yes. Based on the information provided to the Commissioner your legal expenses are an allowable deduction as they were incidental or relevant to the production of your income.
The expenses are an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You incurred legal expenses to defend allegations made against you in the workplace, in carrying out your duties.
Your employment was going to be terminated.
You engaged a lawyer to defend these allegations.
You incurred expenses.
You have not been reimbursed and will not seek to claim for these expenses through insurance or other means of reimbursement.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
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