Private ruling: Legal expenses
Date of advice: 25 May 2022
Published: August 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for legal expenses to defend your employment? | A1: Yes. Based on the information provided to the Commissioner, your legal expenses are an allowable deduction as they were incidental or relevant to the production of your income. The expenses are an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997).

Relevant facts and circumstances: A number of years ago, a series of complaints was made against you in the workplace. These complaints were regarding actions that were required in the completion of your duties. The complaints were formalised by the management team. You sought legal assistance to protect your professional reputation and your job. The legal advice was in relation to responding to the allegations and your workplace rights along with how to manage the situation to avoid further scrutiny. The initial allegations were a direct result of your professional duties. You were at risk of disciplinary action or termination of your employment if the allegations were not defended.

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