Private ruling: Taxation of a government grant
Published: March 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 01 July 2011

Ruling: Q1: Is the grant you received assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No.

Relevant facts and circumstances: A state government scheme pays a grant when qualifying conditions are met. The scheme provides individuals with a one-off payment. In 2011 you qualified for, and received a grant.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a taxpayer includes income according to ordinary concepts (ordinary income). 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 of periodicity, recurrence or regularity. The grant that you received is not income from rendering personal services, income from property or income from carrying on a business. The payment was a one off payment and thus it does not have an element of recurrence or regularity. The grant you received is not income according to the ordinary concepts of income and is not considered to be assessable income. Accordingly, the grant will not form part of your assessable income under section 6-5 of the ITAA 1997.

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