Private ruling: Assessable income
Published: August 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017
Date scheme commenced: 1 July 2013

Ruling: Q1: Will the payment you receive be assessable income? | A1: Yes.

Relevant facts and circumstances: You are an employee. Outside of your hours of employment you pursue a hobby and spend a significant period of time outside your hours of employment on your hobby. You use your hobby activities for the benefit of the broader community by taking part in and assisting in the organisation of an annual charity event. Based on your commitment to the hobby and the personal attributes you bring to the hobby, your employer proposes to make an occasional voluntary payment to you. You will display the signage of your employer where possible. There is no contractual or other relationship between you and your employer which requires payment of this nature to be made, or requiring ongoing payments of a similar nature.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 15-2

Reasons for decision: Summary: Section 15-2 of the Income Tax Assessment Act 1997 (ITAA 1997) includes in a taxpayer's assessable income the value of all allowances, gratuities, compensation, benefits, bonuses and premiums provided to the taxpayer in respect of, or for or in relation directly or indirectly to, any employment of or services rendered by' the taxpayer. Amounts that are a reward or remuneration for services rendered, or a product, incident or consequence of employment, come within the scope of subsection 15-2(1) of the ITAA 1997. Taxation Ruling TR 1999/17 sets out the Commissioner's view as to whether the receipts and other benefits obtained from involvement in sport are assessable income. Payments to sportspeople are often made in the absence of any legal obligation of the payer to do so. Such payments are referred to as a voluntary payment. Typically, voluntary payments are made as either a series of payments, such as under a grant, or as an occasional payment, such as an award or prize. The fact that a payment is voluntary does not mean that it cannot be assessable income. The issue of whether voluntary payments are income in the hands of the recipient was considered by the High Court in FC of T v. Dixon (1952) 86 CLR 540: (1952) 10. Case law shows that: • to determine if a voluntary payment is income, a broad judgement must be made of all the circumstances in each particular case, there is no fixed set criteria against which a particular receipt has to be measured; • the form of a receipt is an important factor in determining whether a receipt is income; however, form on its own will seldom determine the issue. In your case, your employer is proposing to make an occasional voluntary payment to you for the attributes you bring to your hobby and you will carry your employer's signage where possible. The payment that you will receive is considered to be indirectly related to your employment. It is considered that you would not receive the payment if you were not employed by the provider of the amount. Therefore it will form part of your assessable income under section 15-2 of the ITAA 1997.