Private ruling: Deduction - legal expenses
Date of advice: 10 September 2024
Published: 21 October 2024
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a deduction for your legal expenses? | A1: Yes. Based on the information provided to the Commissioner you can claim a deduction for the legal expenses. The legal expenses have the relevant connection with the derivation of your assessable income. You sought the services of a solicitor to assist you with your income protection claim through your superannuation fund to receive income protection payments which are ordinary income. The legal expenses are an allowable deduction under Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997).

Relevant facts and circumstances: You submitted a claim for income protection payments through your super fund. Initially your claim was denied. You sought the services of a solicitor to appeal the initial decision by the insurance company for the income protection payments. Your appeal was successful, and you were paid for income only and for lost income in previous years. You have declared your income protection payments in the relevant income tax return.

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