Private ruling: Foreign income
Date of advice: 18 November 2019
Published: February 2020
Ruling period: Year ended 30 June 2019 to 30 June 2022
Date scheme commenced: 1 July 2018

Ruling: Q1: Are the payments you receive from a foreign source, on behalf of a child assessable to you? | A1: No. In regards to your circumstances, the Commissioner is satisfied that the child beneficially owns the money that you are receiving on their behalf every month, based on the principles in Tax Determination TD 2017/11 Income tax: who should be assessed to interest on bank accounts? Therefore the income will not be your income and will not be assessable to you.

Relevant facts and circumstances: In 19XX you met your ex-spouse who is an overseas citizen and has been in Australia since 19XX. You are an Australian resident for taxation purposes. In 20XX you and your ex-spouse had a child, who is still under 18. Your ex-spouse lived and worked overseas for many years before coming to Australia. At a certain age your ex-spouse was entitled to an overseas payment. Your ex-spouse is now entitled to receive this overseas payment. You and your ex-spouse agreed that this payment would only be paid to the child. You declined to receive your share of these payments. You received the first payment in 20XX and you will continue to receive these payments until the child turns 18 years of age in 20XX. You were made the appointed representative payee and receive these payments into your nominated financial institution every month. The payments are specifically paid for the child's care, health, wellbeing and personal care. You do not receive any of the foreign sourced payments as additional income.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 6AB | Income Tax Assessment Act 1997 section 6-5