Charles Moore & Co: retailer gets robbed banking funds.
Held – Deductible because it is logical that the risk could happen and banking is connected to
running a business
Putnin: TP wanted to defraud the commonwealth, he claimed a deduction for legal expenses
relating to his defence.
Held – deductible because similarly to herald weekly because may have been protecting his
Creer v FCT: taxpayer was a partner and the firm expelled him.
Held – deductible because related to the restoration of the taxpayers income entitlement
FCT V Day: a public servant (customs officer) whose employment was set by an act of
parliament. They took action under parliament so that he would either be sacked or have a
reduced pay. Day spent money defending himself.
Held – deductible because he is seeking to keep his job. In the course of gaining / producing =>
keeping his job
FCT v Anstis: study allowance was paid and a series of requirements need to be met ie grades.
She said it was her assessable income. Also worked a casual job, two sets of income.
Held – deductible by (a) because given that her pay is income
-Was the expenses incurred in gaining or producing?
oIf she didn’t buy textbook – pass – not get paid
oTherefore it is in the course of g/p
oShe didn’t earn the allowance though – she gained it??
-An exceptional case so they changed the law after this
Cecil Brothers: No prudent taxpayer test of how much ought to be spent. Court doesn’t care if it’s
a good or a bad deal.
Magna Alloys: directions are charged with criminal offences by the government. Magna
funds/suppose their defence of those charges.
Held – deductible bc of nexus to the taxpayers business
1. Whats the business
2. Whats the issue? What are you protecting by paying directors legal fees? – like an
advertisement, you want good name -> Deduction
Snowden: legal expenses for goodwill threatened and future income earning capacity – Protect of
how they do the thing.
Held – deductible because could do nothing else but defend themselves and was not capital
La Rosa: Drug money, someone dig up your money and take it whilst you are in jail
Held – Deductible because
-What is the business: drug importation
-Is there logical nexus: criminals hide money and yes there is chance of it being stolen