Private ruling: Foreign Income
Date of advice: 13 November 2024
Published: 13 January 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the payment you received from another country included in your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Subsection 6-5 of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly and indirectly from all sources, whether in or out of Australia, during the income year. No tax has been levied on the payment; accordingly, this is part of your assessable income when received as part of your worldwide income as a resident of Australia.

Relevant facts and circumstances: You arrived in Australia in 19XX, and you became an Australian resident. From XX 19XX to XX 19XX, you worked overseas, Country A. From XX 19XX, you returned from Country A and have been living in Australia. While overseas, you continued to lodge your tax returns in Australia. In XX20XX, you turned XX years old. You made contributions of $XXX between 19XX/XX to 19XX/XX income years, withheld by your employer as a contribution and paid into this fund. There are two option to receive the funds, but you are only eligible to receive the amounts as a one-off payment method. On XX/XX/20XX, you received a one-time payment from the Government of Country A, the Department. This payment is not taxed and could not be requested at any time. The payment was made due to reaching the age of XX years. This entitlement is a payment equal to payments with a one-off payment of $XXXX less wiring fees. The amount received was $XXXX Australian dollars and this was not rolled into your superannuation fund.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 6-5(2)

Reasons for decision: Summary: Subsection 6-5 of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly and indirectly from all sources, whether in or out of Australia, during the income year. This is known as your worldwide income. It includes any foreign income you may receive from: • Pensions and annuities • Business activities • Employment and personal services • Assets and investments • Capital gains on overseas assets. Assessable income consists of ordinary income and statutory income provided it is neither exempt nor non-assessable non-exempt income. In this case, the amount was from your employment income and paid out to you as a xx lump-sum amount when you reach the correct age of XX years old. No tax has been levied on the payment; therefore, this is part of your assessable income when received as part of your worldwide income as a resident of Australia.