Private ruling: Income
Published: November 2014
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you assessable on monthly amounts received? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(2) | Income Tax Assessment Act 1997 Section 6-10 | Income Tax Assessment Act 1997 Section 15-2

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. Section 6-10 of the ITAA 1997 provides that amounts that are not ordinary income may be included in assessable income under another provision as statutory income. Section 15-2 of the ITAA 1997 provides that the value of all allowances, gratuities, compensation, benefits, bonuses and premiums given or granted in respect of employment or services rendered are included in assessable income. Therefore, if a gift is considered to be ordinary income or an allowance, a gratuity or a benefit, it will be assessable income. Taxation Ruling IT 2674 Income tax: gifts to missionaries, ministers of religion and other church workers - are the gifts income, deals specifically with the assessability of gifts received by church workers. Based on established case law, the provides that if a church worker receives a gift because of, in respect of, for, or in relation to any income-producing activity of the church worker, the gift is assessable income. The income-producing activity can arise from the church worker's office or occupation or some service rendered or to be rendered by the church worker. In other words, a gift is assessable income if it is possible to: • relate the receipt of the gift by the church worker to any income-producing activity on his or her part; or • point to any employment, personal exertion or other income-earning activity by the church worker of which the receipt of the gift is in a relevant sense a product or incident. A gift received in these circumstances is assessable income even if: • the donor is not legally obliged to make the gift; or • gift is made by a family member, friend or fellow worker; or • if the church worker is an employee, the gift comes not from the employer but from somebody else; or • the church worker is not in any way motivated by the prospect of receiving the gift but is motivated only by a genuine commitment to religious beliefs. While we accept that money is tithed in your name to the church, it is done so to support the work you are doing at the Centres. Therefore, the monthly amounts you receive are assessable income.

Relevant facts: You volunteer at the Centres. | A large number of people from your church tithe money in your name to the church to allow you to volunteer at the Centres. | From these tithes, you receive a monthly amount paid to you by your church into your bank account.