Private ruling: Deduction - income protection policy - assessable income
Date of advice: 7 October 2022
Published: December 2022
Ruling period: Year ended 30 June 2021 | Year ended 30 June 2022
Date scheme commenced: 1 July 2020

Ruling: Q1: Are the income protection premiums an allowable deduction? | A1: Yes. Based on the information provided to the Commissioner, the premiums you paid in relation to the income protection policy are deductable under Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) to the extent that the premiums relate to the income protection portion of the policy and do not relate to any capital component. | Q2: Is the income protection payment of $XXXX per month assessable income in Australia? | A2: Yes. Based on the information provided to the Commissioner the $XXXX per month payments are assessable as ordinary income and must be included in your Australian tax return.

Relevant facts and circumstances: You are a citizen of country Y. You were living and working in Country Y. You took out a income protection policy in country Y. You moved permanently to Australia and maintained this policy. You made a claim on this policy and received $XXXX per month from XXXX 2021 to XXXX 2021. You are a resident of Australia for taxation purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 8-1