Private ruling: Income tax - deductions - legal expenses
Date of advice: 10 August 2018
Published: October 2018
Ruling period: Financial ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Can you claim a deduction for legal expenses incurred in pursuing a workers compensation payment for lost earnings. | A1: Yes Having considered your circumstances, you are entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 .

Relevant facts and circumstances: You were initially denied workers compensation by the insurance company. You engaged a lawyer to take legal action against the insurance company to pursue your workers compensation claim for lost wages at the employment tribunal. Your claim was subsequently accepted as a result of the legal action. Your income for the financial year ended 30 June 20XX includes the workers compensation claim you pursued. You incurred legal costs in pursuing your entitlement to workers compensation payments for lost wages.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1