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Edited version of private advice
Authorisation Number: 1052171892363
Date of advice: 22 September 2023
Ruling
Subject: Deductions - legal expenses
Question
Are you entitled to claim a deduction for legal expenses you incurred to pursue back payment of salary and wages?
Answer
Yes, providing that the legal action relates solely to the recovery of wages, the legal expenses are an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 in the relevant income year.
This ruling applies for the following period:
For the year ended 30 June 20XX
The scheme commence on:
DDMMYYYY
Relevant facts and circumstances
In MMYYYY you suffered a workplace injury at work.
On DDMMYYYY you were paid a total compensation amount from the Work Cover provider for $X.
The compensation amount consisted of back payment of your underpaid wages, as well as an interest component.
You incurred legal fees of $X associated with the pursuing the legal claim with your employer and Work Cover provider.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1