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Are legal expenses for CCMA legal advice deductible?

Posted 24 November 2014

A company I worked for claimed intellectual property of software I developed in my private time for a private client. Their claim was based on the wording in my employment contract. When I refused to hand over the IP, they made my life a living hell. I left the company citing constructive dismissal and went to the CCMA. While I represented myself, I paid a labour lawyer for consulting on what to do.

Can the costs of the labour lawyer be seen as a legal expense even though I lost the CCMA case? I was claiming 12 months salary which would have been taxable.

From the SARS website:

LEGAL EXPENSE i.t.o. section 11 (c)

You may claim legal expenses incurred for any claim that is directly related to your salary package, such as a CCMA case where the claim will, as a result of a court order, be included in income or an out of court settlement in respect of labour disputes.

These amounts must be completed next to code 4044.

TaxTim TaxTim says:
24 November 2014 at 15:43

Provided the expenses is incurred in income that would be taxable in your hands then yes you may claim this amount for tax purposes.

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