Private ruling: Compensation lump sum payment
Date of advice: 1 May 2020
Published: June 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the lump sum you are to receive or any portion thereof be included in your assessable income? | A1: No.

Relevant facts and circumstances: You sustained compensable disabilities. You will receive a lump sum payment.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 15-30 | Income Tax Assessment Act 1997 section 118-37

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with receipts of ordinary income. It does not operate to include in assessable income amounts of a capital nature. The money to be received will be capital in nature and therefore not assessable income. The other applicable sections, section 15-30 of the ITAA 1997 and section 118-37 of the ITAA 1997, also will not apply to make the income assessable. Therefore the payments you receive will not be included in your assessable income.