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Can you claim for personal legal taxes?

Posted 15 July 2014 under Tax Questions



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I have incurred legal costs for my parents who are dependent on me for support. This was done in my private capacity and there is no capital gain for me from it. Can I claim for this in my tax return?

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TaxTimTaxTim says:
15 July 2014 at 11:34

What was the purpose of the legal costs?


Elle says:
15 July 2014 at 11:39

The case in question is that my parents own a property and the current tenant [family member] is claiming rights to own the property and refuses to move out of the property. The legal costs incurred were for consultations for a trial and preparation thereof for this dispute.


TaxTimTaxTim says:
15 July 2014 at 11:50

Unfortunately not, the result of this case would not result in income earned for you or your parents so no deduction can be claimed.


Elle says:
15 July 2014 at 11:52

Thank you for your response. Would it apply if the house in question is going to be sold and monies be returned to my parents once the case is completed? The house cannot be sold until the tenant is removed from the property.


TaxTimTaxTim says:
15 July 2014 at 11:56

That would be a capital gain not an income. If you can demonstrate to SARS that the legal costs are a cost of selling the property, then you would be able to deduct this from the selling price and reduce the Capital Gains, not the actual income.


Elle says:
15 July 2014 at 12:16

Thank you. What section of the tax return do I submit that under? Sorry I have never submitted this before in a tax return.


Elle says:
15 July 2014 at 12:22

Thank you. What section of the tax return do I submit that under? Sorry I have never submitted this before in a tax return.


TaxTimTaxTim says:
15 July 2014 at 14:06

You would not include this anywhere for now, when you do sell the house, you would reduce the Proceeds amount by the costs.


Elle says:
15 July 2014 at 14:08

Thank you.


TaxTimTaxTim says:
15 July 2014 at 14:12

Only a pleasure!


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