Private ruling: Deductibility – theft by a person other than an employee
Date of advice: 17 January 2018
Published: May 2018
Ruling period: 30 June 2018
Date scheme commenced: 1 July 2016

Ruling: Q1: Is the taxpayer eligible to claim a deduction for the loss of theft by a person other than an employee during the financial years ending 30 June 2017 and 30 June 2018 under section 25-45 of the Income Tax Assessment Act 1997 (ITAA 1997) when you lodge the tax returns? | A1: Yes Having considered your circumstances and the relevant factors, you are eligible to claim a deduction for loss of theft under section 25-45 of the ITAA 1997. Further information on deductibility can be found on our legal database at our website ato.gov.au and entering ATO ID 2001/318 into the search bar.

Relevant facts and circumstances: You are a company and engaged the services of a person other than an employee to assist you with your taxation obligations. This person assisted you with your business affairs for over 20 years. You gave them access to your bank accounts and other company matters in order to manage the payment of wages and expenses. In 20XX you discovered money was being taken from your bank accounts. You contacted your bank to identify where this money was going. The bank provided you with an itemised list of these transactions showing this money was being deposited into an account associated to this person since 20XX. During the financial years of 2017 and 2018, an approximate total in excess of $100,000.00 had been withdrawn from your bank account for their own financial gain. The relevant amounts have been included in your assessable income. You no longer engaged the services of this person as this has led to other consequences for you to deal with. You reported this matter to the authorities in 20XX and this is still ongoing. It is likely you will lodge an insurance claim.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 25-45