Private ruling: International - income
Published: July 2013
Ruling period: Year ending 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Is all of your long service leave entitlement assessable in Australia? | A1: Yes

Relevant facts and circumstances: You were employed in Australia for a number of years by an Australian company. You and your family moved overseas in a few years ago and worked for the same company to the present day. You accrued long service leave during the full period of service both in and out of Australia to the present day. You accrued X % of the long service leave for work carried out in Australia and X % of the long service leave for the work carried out overseas. Your employer has terminated your employment and you will receive a lump sum payment with a unused long service leave component For the period of time you worked overseas you were a non-resident of Australia for taxation purposes. You will be a resident of Australia for taxation purposes when you receive your payment.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(3) | Income Tax Assessment Act 1997 Subsection 6-5(4)

Reasons for decision: Summary: Generally where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. Subsection 6-5(4) of the ITAA 1997 provides you are taken to have received the amount of income as soon as it is applied or dealt with in any way on your behalf or as you direct. Therefore the payment you receive for unused long service leave will be assessable in Australia as you will be a resident of Australia for taxation purposes when you receive the payment from your former employer.