Private ruling: Income
Date of advice: 21 October 2025
Published: 8 December 2025
Ruling period: Period ending DD MM YY
Date scheme commenced: DD MM YY

Ruling: Q1: Will the proceeds received on surrender of the foreign investment bond inherited from your parent be non-assessable under section 26AH of the Income Tax Assessment Act 1936 (ITAA 1936) where you have surrendered the bond more than 10 years after the commencement date? | A1: Yes. Amounts received on surrender or maturity of a life insurance policy may be included in assessable income under section 26AH of the ITAA 1936. However, where the amount is received more than 10 years from the date of commencement of the policy, they do not fall within the operation of section 26AH and are not included in assessable income. The insurance bond commenced on DD MM YY, assuring the lives of your parents (and others). You inherited the bond on the passing of your parent (your other parent having pre-deceased them) and chose to surrender it. You received payment for this on DD MM YY which was more than 10 years from the commencement of the risk for the bond.

Relevant facts and circumstances: On DD MM YY your parents made an application for an insurance bond held with Foreign Company A. The bond was set up under Account Type A and insured their lives as well as those of two other family members. The bond was set up in the form of a trust of which you were the beneficiary. The bond was registered in Location A. The start date for the bond was DD MM YY. You inherited the bond on the passing of your parent, your other parent having pre-deceased them. You chose to surrender this bond, receiving a payment on DD MM YY.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 26AH