Private ruling: Applicable fund earnings
Date of advice: 27 October 2023
Published: 11 December 2023
Ruling period: Year ended XX June 20XX
Date scheme commenced: XX July 20XX

Ruling: Q1: Is any part of the lump sum payment received by you included in your assessable income under section 305-70 of the Income Tax Assessment Act 1997 ? | A1: No. The lump sum payment relating to your mandatory pension contributions is not assessable income. This is because you did not receive any applicable fund earnings, were an Australian tax resident when you received the payment and were refunded more than 6 months after ceasing your foreign employment.

Relevant facts and circumstances: You moved overseas to work for a company. During your employment, you were a foreign resident for tax purposes. You paid mandatory contributions to a pension fund scheme which was deducted from your salary. You applied for a refund of these contributions 24 months after leaving the overseas country. You were refunded the contributions. You were refunded the exact same amount that you contributed during the course of your employment. You will lodge your 20XX income tax return as an Australian resident for tax purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 305-B | Income Tax Assessment Act 1997 section 305-70