Date of advice: 21 March 2019
Published: May 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Is any part of the lump sum payment (death benefit) you received from the overseas pension scheme assessable income? | A1: No. Having considered your circumstances, we accept that the lump sum payment (death benefit) is inheritance you have received, which is not ordinary income or statutory income. As such the lump sum payment (death benefit) you have received is not assessable income, and it is not required to be included in your income tax return.

Relevant facts and circumstances: You are an Australian resident for taxation purposes. Your sibling died in Australia. Prior to this, your sibling had been receiving a pension from an overseas pension scheme in Country Y. The overseas pension scheme allowed a lump sum death benefit to be payable to you as the nominated person. You submitted the death benefit claim form to the overseas pension scheme. You received correspondence from the overseas pension scheme advising that your claim had been processed, along with a cheque for the amount payable in the currency of Country Y. The amount was converted to Australian currency by your Australian Financial Institution, and the amount was then deposited to your Australian bank account. The tax authorities in Country Y have not imposed any income tax on the lump sum death benefit you have received. Whilst the lump sum payment formed part of your late sibling’s estate, the lump sum death benefit was paid directly to you rather that through the estate.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-10 | Income Tax Assessment Act 1997 s ection 6-15