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Edited version of private advice
Authorisation Number: 1051646234812
Date of advice: 16 March 2020
Ruling
Subject: Work related expenses - legal expenses
Question
Are you entitled to a deduction for legal expenses incurred by you to resolve a workplace dispute?
Answer
Yes. Having considered your circumstances, it is accepted that the legal expenses incurred by you are incidental and relevant to you earning your assessable income. Therefore, the legal expenses are an allowable deduction under section 8-1 of the ITAA 1997.
This ruling applies for the following period
Year ended 30 June 20XX.
Year ended 30 June 20XX.
The scheme commences on
1 July 20XX.
Relevant facts and circumstances
A number of years ago you commenced a new job with a new employer (your employer).
You suffered a serious injury.
You had multiple surgeries on the injury.
You believe that you were subjected to bullying and harassment at your workplace.
You informally voiced your concerns to senior staff members.
You believe the bullying and harassment continued and intensified after you voiced your concerns.
You were served with disciplinary action.
You were advised of a meeting between you and your employer which you refused.
You later found out that your employer was going to offer you a mutual separation offer.
You sort legal assistance from ABC Lawyers (your solicitors).
A short time later your solicitors advised your employer that they now act for you in relation to the matters arising from their employment.
After consultation between you, your solicitor and your employer you agreed to a Deed of Release.
A few days later under the terms of the Deed of Release your employment with your employer ceased.
You received a sum of money from your employer under the terms of the Deed of Release.
There are numerous none disclosure clauses in the Deed of Release which you are conscious of adhering to when applying for this private binding ruling.
You incurred legal expenses to defend you position.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1