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Edited version of private advice
Authorisation Number: 1051605646192
Date of advice: 6 November 2019
Ruling
Subject: Legal expenses
Question
Are you entitled to a deduction for legal expenses associated with seeking legal advice regarding your response to allegations of misconduct?
Answer
It is accepted that the legal expenses you have incurred directly relate to your income earning activities. They are not private or domestic in nature and are also not capital in nature. Therefore, the legal expenses will be an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997).
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
In XXXX your employer reviewed allegations made against you of misconduct in the course of your work.
You obtained legal representation to assist with defending your conduct.
You responded to the allegations of misconduct with the assistance of your legal representation via written correspondence.
Your superior advised that you would retain your position and you received a warning for your actions.
You incurred legal fees.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1