Private ruling: Income - Grants
Published: October 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you required to include Grant A in your assessable income? | A1: No. | Q2: Are you required to include Grant B in your assessable income? | A2: No.

Relevant facts and circumstances: You received $X from Grant A. The payment was made to you to assist with the purchase of an investment property. You received $X from Grant B. The payment was made to you to assist with the purchase of an investment property.

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

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. Ordinary income is income according to ordinary concepts and is generally considered to include: · amounts received in return for personal services, whether received in the capacity of an employee or otherwise; and · amounts received periodically or regularly and which the recipient relies on for the maintenance of themselves and /or their dependants ( Federal Commissioner of Taxation v. Dixon (1952) 86 CLR 541). You received a payment for Grant A for which the primary purpose is to provide financial assistance to people purchasing or building a new home, thereby boosting the building industry. You received a payment for Grant B for which the primary purpose is to provide financial assistance to people purchasing or building a new home, thereby boosting the building industry. Both grants were not paid because of employment, services rendered, investment or the operation of a business. The grants were received as a one off lump sum payment and the motive of the body making the payment is to provide assistance for the purchase of a new home, not to help the recipients or their dependants pay for their regular living expenses. The grants are not income according to ordinary concepts and therefore are not ordinary income. Accordingly, the grants will not form part of your assessable income under section 6-5 of the ITAA 1997.