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DB 43: Making good loss from misappropriation by partners
or “Claiming tax deductions for losses caused by a partner's theft”
You could also call this:

“Tax deductions when returning stolen property you paid tax on”

If you get money from stealing property, you can claim a deduction for giving it back. This applies when you’ve had to pay tax on the stolen property as income. You can deduct the amount you give back to the rightful owner of the property. This deduction is for the tax year when you return the property or money.

When the law talks about giving back the property, it doesn’t just mean to the original owner. You can also give it back to someone who has a right to claim on behalf of the owner.

This rule is an addition to the general permission for deductions. It overrides some limits on deductions, like the capital limitation and private limitation. However, other general limitations on deductions still apply.

Remember, this only applies if you’ve already had to pay tax on the stolen property as income under section CB 32.

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Next up: DB 45: Bribes

or “Bribes cannot be claimed as tax deductions”
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Part D Deductions
Specific rules for expenditure types

DB 44Restitution of stolen property

  1. A person who derives income under section CB 32 (Property obtained by theft) is allowed a deduction for the amount of restitution that they make to a person who is beneficially entitled to property to which section CB 32 applies.

  2. The deduction is allocated to the income year in which the person makes restitution.

  3. In this section, restitution includes restitution made to a person claiming through the person beneficially entitled to the property.

  4. This section supplements the general permission and overrides the capital limitation and the private limitation. The other general limitations still apply.

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