Private ruling: Assessable income foreign pension
Date of advice: 22 July 2024
Published: 2 September 2024
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 30 June 20XX

Ruling: Q1: Is the benefit you receive from Country X included in your assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. Generally, subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year. However, article X of the Country X Convention provides that social security payments by Country X to a resident of Australia shall only be taxable in Country X. Accordingly, the pension you receive is therefore not assessable income under section 6-5 of the ITAA 1997 as you are a resident of Australia.

Relevant facts and circumstances: You are an Australian resident for tax purposes. Your spouse passed away whilst rendering services in Organisation A. On XX/XX/20XX, you were granted a pension from Organisation B. On XX/XX/20XX, you commenced receiving these payments. The pension is paid to you monthly in the currency of Country X.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | International Tax Agreements Act 1953