Private ruling: Assessable income - payments from parents
Published: July 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Are the payments made to you from your parents included in your assessable income? | A1: No

Relevant facts and circumstances: Your parents live in their own home and require your assistance. You and your siblings provide a level of care together however you provide assistance in excess of that provided by your other siblings. You provide additional personal care and assistance to your parents in the following ways: · purchase of food and personal items · transport and attendance at medical appointments · organising various home help assistance · receiving and responding to numerous phone calls from your parents during the day · conducting financial affairs including paying accounts, banking, medical reimbursements · managing financial affairs including updating and maintaining accounting records and preparing information for the completion of their tax returns. You receive money from your parents for undertaking these tasks. Your siblings do not receive any specific payments for the care they provide. The payments are in gratitude and are made voluntarily and are not solicited. There is no set frequency in the giving of the payments. The amount of any payment is assessed considering a number of unknown factors including an estimate of the hours spent in providing additional assistance. You are financially supported by your spouse and from your investments and are not dependent upon voluntary payments from your parents.


Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources. The main characteristics of income that have been identified may include the receipt being: · earned · for the replacement of income · received periodically and regularly, and · relied upon or expected Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources. Ordinary income has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business. Generally, a gift is regarded as a personal windfall gain or as the result of a domestic or personal arrangement and not as ordinary income unless you have received the money because of, in respect of, or in relation to any income-producing activity of yours. Payments such as those between direct family members for household duties are generally of a private or domestic nature. In your case, you care for your aging parents. You receive unsolicited sums of money from your parents for your assistance. The payments are not received periodically or regularly and given more out of gratitude rather than in return for the rendering of services. The money is considered to be made because of the familial relationship between you and your parents and not in relation to any income-producing activity of yours. As such the money is not considered to be ordinary income and as such is not assessable.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | This ruling applies for the following period Year ended 30 June 2012 | Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 Reasons for decision