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Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 42631
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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A CBD city based Chartered Accountant and tax agent gave me negligent advice that has resu

Customer Question

A CBD city based Chartered Accountant and tax agent gave me negligent advice that has resulted in tax liabilities that could have been avoided. I was twice assured that he was an expert in this and he was sure that there would be no tax liability from structuring a transaction a certain way, despite me wanting to structure it in a way that definitely did not have tax. They had all the relevant facts and still gave advice that has cost me.
The first part of my question is if I make a claim, will any compensation I receive for the negligent action be taxable income?
The second part so I am aware: is a negligent payout in such a circumstance a tax deduction for the offending accountant if they pay?
Submitted: 1 year ago.
Category: Australia Law
Expert:  Leon replied 1 year ago.
Good Evening
My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question.
Was the advise in writing?
The claim you get paid should not be taxable because the money was not characterised as income in the first place.
Your claim would be for the tax that you paid as a result of the negligence advise including any penalties.
I Hope this makes sense?
Customer: replied 1 year ago.
The advice was confirmed verbally but I am trying to find the old email discussion as well. You did not answer the second part of my question (so I am aware): is a negligent payout in such a circumstance a tax deduction for the offending accountant if they pay?
Expert:  Leon replied 1 year ago.
Good Morning
It would be their insurance that will be paying this.
Anything that is related to your work is generally a tax deduction. So in this case it would be a tax deduction to them if they pay it out of their pocket. If the insurance pays it then only the excess they pay will be deductible.
I hope this makes sense. If there is nothing further thank you for using my services.
If I have missed anything, or you have any further questions please let me know
If there is anything else in the future please do not hesitate to ask.
Please do not forget to leave positive feedback.
Regards
Leon
Expert:  Leon replied 1 year ago.
Good Afternoon
I'm just following up our discussion earlier this week and seeing whether there is anything else I can assist you with.
If I have missed anything, or you have any further questions please let me know.
If there is anything else in the future please do not hesitate to ask.
Please do not forget to leave positive feedback.
I look forward to hearing from you.
Regards
Leon