When Are Legal Expenses Deductible?

Learn the key principles for deducting legal costs including various scenarios where purpose and timing shape deductibility.

In this session, we cover:

• Introduction

  • General deductible principles

• Legal expenses of an employee – contracts

  • Romanin v Commissioner of Taxation [2008] FCA 1532​

• Legal expenses of an employee – defending claims

  • Commissioner v Shane Day [2008] HCA 53

• Legal expenses of an individual carrying on a business

  • Spriggs v FCT and Riddell v FCT

• Defamation and reputational risks

  • XPTC v FCT [2022] AATA 4147

  • FCT v Wood 2023 [2023] FCA 574

• Settlement of legal actions

  • Duncan and Commissioner of Taxation [2020] AATA 2540​

• Other considerations

Date recorded: 1 October 2025