Private ruling: Work related expenditure - legal expenses
Date of advice: 6 August 2021
Published: October 2021
Ruling period: Year ended 30 June 2020
Date scheme commenced: X XXXX 20XX

Ruling: Q1: Are the legal expenses you incurred deductible under section 8-1 of the Income Tax Assessment Act 1997 ? | A1: Yes. Having considered your circumstances and the relevant factors, it is accepted the legal expenses are deductible because they were incurred in gaining or producing your assessable income. The expenses are not of a capital nature and are not considered to be of a private or domestic nature.

Relevant facts and circumstances: You are an employee of an organisation, having joined XX years ago. You have received a number of promotions. Approximately ten years ago you were in charge of a team assigned to a particular task. You disagreed with senior management's decision to cease the work on the task. Shortly after the disagreement, you were demoted to a position you have not held for XX years. This ignored standard management process. The demotion represented a significant drop in your pay. You felt bullied and refused to accept the demotion. You lodged a work cover claim and were on sick leave for XX months. It was your wish to return to your previous position. However, you were consistently targeted and harassed by management and prevented from acquiring a commensurate position. You were reassigned to other duties outside of the team. You assert that these duties were well below your training and experience. You believe you were being harassed and management were trying to force you to quit. Shortly after, an article was published in the media and a story followed, which reinforced your concerns regarding the task your team was working on. You sought the services of a solicitor to lodge a submission to the relevant Conduct Commission. You made the submission as you needed to comply the Code of Conduct. Any breach of this code could result in a loss of employment. You sought to be reinstated to your previous role and your previous level of income, gain protection against retribution and to highlight the alleged corruption. The submission was lodged with the relevant authority. After having been reviewed, it has now been referred on for further investigation. The authority afforded you whistle-blower protection against any reprisals. You have incurred $X,XXX.00 in legal expenses.

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


This ruling applies for the following period: