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Edited version of private advice
Authorisation Number: 1052170509201
Date of advice: 19 September 2023
Ruling
Subject: Work related expenses - legal expenses
Question
Are you entitled to a deduction for the legal expenses you incurred?
Answer
Yes.
The legal expenses incurred by you for advice and action to obtain correct payment of salary were relevant to the production of income as an employee. The legal expenses incurred by to you to obtain advice and action to curtail bullying directed to you in your workplace, were incurred as a consequence of your day-to-day activities as an employee. Therefore, the legal expenses you incurred for both these purposes 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 commenced on:
1 July 20XX
Relevant facts and circumstances
Your legal expenses related to your employment with two different employers.
You worked for Employer A from about XX/20XX to XX/20XX.
Employer A was not paying your salary correctly so while employed, you sought legal advice and action for payment of the correct salary and the recovery of salary.
You worked for Employer B from about XX/20XX to XX/20XX.
When Employer B stopped paying your salary and you were allegedly subjected to bullying in the workplace, you sought legal advice and action while still employed.
The legal action was taken to demand payment of salary and to request that measures be taken to curtail the bullying as it impacted on your ability to carry out your day-to-day duties.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1