Taxation Determination TD 93/141







[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]: 1. No. The legal expenses are of a capital nature and are not deductible under section 8-1 (formerly subsection 51(1)). | 2. Although these expenses are incurred by the lessee in the course of gaining or producing assessable income or carrying on a business for that purpose, the purpose of the expenditure is to secure the lessee's right to possession of the asset that is being leased and accordingly is of a capital nature. | Example: Z leases business premises from ABC P/L. ABC P/L serves notice to terminate the lease. | Z incurs legal costs of $1250 engaging a solicitor to defend the action. The $1250 is not allowable under section 8-1 as these expenses are of a capital nature. | Commissioner of Taxation 22 July 1993 | Previously issued as Draft TD 93/D120


Legislative references: ITAA 51(1); ITAA 1997 8-1
Subject references: leases; legal expenses; termination of lease