LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

VIC Employment-related Writ - ATO Deductibility of Legal Expenses?

Discussion in 'Employment Law Forum' started by BronzeSilverGold, 28 January 2015.

  1. BronzeSilverGold

    Joined:
    28 January 2015
    Messages:
    2
    Likes Received:
    0
    Hello,

    I was served with a writ in County Court (Vic) from my ex-employer accusing me of violating my employment agreement that I had with them. The underlying subject matter was they said they were entitled to some IP.

    Anyway, we settled confidentially out of court.

    I claimed the legal expenses in my personal tax (D5 - work related deductions). Since it was a high amount, it got flagged by ATO and they did an audit.

    They have rejected the claim since they believed it was 'capital in nature relating to an asset (which asset I ask) rather than the derivation of income from that asset'.

    I don't see how that is relevant. I would think it is related to settling a dispute arising out of employment agreement - which is deductible I believe under TR 2000/5.

    I guess they see the fact that it related to IP and it was in their eyes a fight over IP (asset) they may have just ruled that way, but surely the underlying issue was it was a dispute relating to employment agreement?

    Thanks in advance if anyone can shed light on this.
     
  2. Victoria S

    Victoria S Well-Known Member

    Joined:
    9 April 2014
    Messages:
    446
    Likes Received:
    44
    Did you have an accountant advise you that you could claim it as a work-related deduction?
     
  3. BronzeSilverGold

    Joined:
    28 January 2015
    Messages:
    2
    Likes Received:
    0
    No, not an accountant but my Barrister and Council did ...
     
  4. Victoria S

    Victoria S Well-Known Member

    Joined:
    9 April 2014
    Messages:
    446
    Likes Received:
    44
    I'd be having a chat with them about their incorrect advice and the way forward then - unless they advised you that it there was potential for the ATO to disagree with your classification and you took the risk anyway. Lawyers have professional indemnity insurance to cover situations where they perhaps give incorrect / negligent advice.
     

Share This Page

Loading...