Private ruling: Work related legal expenses
Date of advice: 20 August 2021
Published: November 2021
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the legal, court and other costs associated with the settlement of a dispute with your employer arising under the enterprise agreement an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes Taxation Ruling TR 2000/5 sets out the Commissioner's view of the application of section 8-1 of the ITAA 1997 to costs incurred by employees and employers in preparing and administering employment agreements. An employment agreement is a reference to an agreement between an employee and an employer regarding employment. In your case, the legal expenses are incurred in protecting an existing right under the employment agreement and therefore an allowable deduction. It is not an expense of a private or of a capital nature.


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


Relevant facts: You commenced work with an employer. | You are remunerated under the terms set out in an Enterprise Agreement (EA) | The applicable legislation governs the operation of the Scheme, of which you are a member. | You are in dispute with your employer as you allege they have contravened the EA. You claim it has failed to make the correct compulsory employer superannuation contributions as required by the applicable rules and relevant regulations. | You have incurring costs relating to the dispute and you believe further costs will be incurred until settlement of the matter expected in XXXX. | You have subsequently incurred further legal costs in the amount of $xx | You will continue to incur legal expenses until the dispute is finalised. | There will not be any reimbursement to you for the expenses directly or through an allowance.