Legal costs s11c- in relation to Jan ITC

Question 1

Legislation- s11c

Answer 1

Simplified chat gpt key points
-Legal expenses can be deducted(
-You can subtract the costs you pay for legal services, evidence collection, witness fees, tax advisors, court costs, and other similar litigation expenses from your taxable income if they’re related to your business- carrying on a trade)
-These expenses must not be capital in nature
-Not related to damages or compensation claims against the taxpayer
-Not related to claims made by the taxpayer to receive money
-Not related to claims that don’t affect taxable income
-Must not be related to any non-taxable income:

Question 2

Hint on deductibility

Answer 2

Special deductions take precedence over the general deduction (section 11(a) in
terms of s23B.

Question 3

Layout

Answer 3

• Sections which it fails into
• Case laws to support argument
• Conclusion

Question 4

Hint on non-commission employees

Answer 4

Sarah is a non-commission earning employee, earning remuneration, therefore
the deductibility of any expenses she incurs is subject to the limitation in s23(m)

Section 23(m) limits expenses to be deducted by employees except for certain
specified deduction that includes the deduction of legal expenses under s11(c).

Question 5

Hint in Jan ITC
if you incur costs to protect your right or which is income earning structure

Answer 5

protect these rights would be capital in nature

Question 6

Hint when doing deductibility
s102?

Answer 6

in terms of section 102 of the Tax Administration Act the burden to proof that
an amount is deductible rests upon the taxpayer.