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Edited version of private advice
Authorisation Number: 1051600766277
Date of advice: 6 November 2019
Ruling
Subject: Deductibility of legal expenses
Question
Are your legal expenses deductible?
Answer
Yes.
Your legal expenses are deductible as your legal action was in relation to claims for items of a revenue nature rather than a capital nature as per Taxation Determination TD 93/29 Income tax: if an employee incurs legal expenses recovering wages paid by a dishonoured cheque, are these legal expenses 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 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You incurred legal expenses in relation to legal action you took against your former employer for unpaid wages and entitlements flowing from the period of employment.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1