Private ruling: Residency
Published: June 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: Question and answer | Is your foreign pension exempt from tax in Australia? | Yes.

Relevant facts and circumstances: You receive a pension from a foreign country. The pension is paid for disabilities you incurred in relation to services in the armed forces of that country. Your pension is exempt from tax in the foreign country.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 11-5 | Income Tax Assessment Act 1997 Section 53-10 | Income Tax Assessment Act 1997 Subsection 6-5(2) | Income Tax Assessment Act 1997 Subsection 6-15(2) | Income Tax Assessment Act 1936 Paragraph 23AD(3)(c)

Reasons for decision: Summary: Included in the list of exemption income in ITAA 1997 section 11-5 is section 53-10 of the ITAA 1997 which deals with wounds and disability pensions. Section 53-10 of the ITAA 1997 provides that wounds and disability pensions (Item 5) are wholly exempt provided that the payment is: (a) of a kind specified in sub-section 315(2) of the Income and Corporation Taxes Act 1988 of the United Kingdom; and (b) similar in nature to payments that are exempt under Divisions 52 or 53 of the ITAA 1997. Your pension meets the requirement for exemption under section 53-10 of the ITAA 1997. Accordingly, your Pension is exempt from tax in Australia.