Published: June 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011


Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are an Australian resident for income tax purposes. The Country X Government announced a distribution of a set amount to all eligible citizens of Country X. Anyone who is 18 years of age or more and holds a valid Country X identity card meets the eligibility of the scheme. The amount is not taxable in Country X.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 6-10 | Income Tax Assessment Act 1997 Subsection 6-15(1)

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. Section 6-5 and section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a taxpayer include ordinary and statutory income derived directly and indirectly from all sources, whether in or out of Australia, during the income year. 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. Other characteristics of income that have evolved from case law include receipts that: · are earned · are expected · are relied upon · have an element or periodicity, recurrence or regularity. The payment is not considered to be earned as it does not relate to services performed or income from carrying on a business. The payment is also a one off payment and thus it does not have an element of recurrence or regularity. Although the payment may be said to be expected, and perhaps relied upon, this expectation arises following the announcement by the Country X Government that if you are an eligible person under the scheme you will receive a one off payment. The payment is not considered to be ordinary income. | Detailed Reasoning - Statutory income: Statutory income is not ordinary income, but is included in assessable income by specific provisions of the income tax law (section 6-10 of the ITAA 1997). There is no specific provision in the income tax law that would include the payment from the Country X Government as assessable income in Australia. Subsection 6-15 of the ITAA 1997 provides that if an amount is not ordinary or statutory income it is not assessable income. Accordingly, the payment from the Country X Government is not assessable income in Australia.

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. | Subject: Government Payment