Private ruling: Investment expenses
Published: October 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for fees incurred to verify your ownership of shares? | A1: No.

Relevant facts and circumstances: You own shares. These shares were forfeited as you had not been in contact with your bank in relation to the shares for a number of years. To retrieve the shares, you were required to provide identification documents notarised by a Notary Public. Your solicitor charged you a fee to notarise these documents.

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

Reasons for decision: Summary: Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. In this case, you incurred expenditure to acquire notarised documentation from your solicitor. This documentation was used to prove your ownership of shares. It is not considered that this expenditure was incurred in gaining or producing assessable income. As the expenditure is related to verifying your ownership of the shares, it is considered capital in nature. Accordingly, the solicitor's fee is not deductible under section 8-1 of the ITAA 1997.