Private ruling: Deductibility of legal expenses
Date of advice: 6 November 2019
Published: January 2020
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Are your legal expenses deductible? | A1: 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?

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