Private ruling: Deduction - legal expenses
Date of advice: 10 July 2024
Published: 19 August 2024
Ruling period: Year ending 30 June 20XX
Date scheme commenced: XX XX 20XX

Ruling: Q1: Are you entitled to claim a deduction for your legal expenses in accordance with section 8-1 of the Income Tax Assessment Act 1997? | A1: Yes. Your entitled to a deduction for your expenditure of $XXX. As the advantage gained was to preserve your current employment and defend the way in which out carried out your employment duties.

Relevant facts and circumstances: Since 20XX, you have worked for your employer as the XXXXX Manager, Company XX, based in XX. While you were performing your work duties in performance managing an employee who directly reported to you, they made a complaint against you for bullying. A decision was made by executive management and HR to remove the employee from your line management including all of their staff and services from your XXX portfolio. Your company's HR employment relations officer, who investigated the matter substantiated all allegations, whilst no procedural fairness was provided to you through the process. You have provided your employer's letter of expectation dated XX XX 20XX, this letter supports the allegations made against you and why you obtained the representation of a legal professional. On the XX XX 20XX, you appointed a lawyer to: • represent you against the claims made against you, • appeal the outcome of the allegations and • preserve your employment. On XX XX 20XX, you submitted your appeal to the group executive people advisory XX XX, the basis of your appeal to HR employment relations officer findings: • the duties you performed on day-to-day basis is reviewing and monitoring staff performance and that the actions taken in performance managing an employee were reasonable management actions within the scope of your position, • the HR processes and procedures including investigation was unjust and unreasonable. Following your appeal, you continued performing your day-to-day duties as XXX manager working with the HR department on other matters involving staff performance within your portfolio. The HR employment relations officer, who originally investigated the bullying case against you, victimised you by excluding you from key information and communications during the month of XX 20XX. The actions taken by the HR employment relations officer significantly impacted your ability to perform your day-to-day duties. Working with HR department, as a key stakeholder, has made your position unsafe and as a result brought your employment under threat for a second time. Due to your employment being under threat again you made a legal complaint through your lawyer for victimisation against the HR employment relations officer. As a result, you retained your employment with your employer and successfully defended the way in which you carried out your employment duties. You have incurred legal expenses of $XX.

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