Private ruling: Assessable income
Date of advice: 27 July 2015
Published: July 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Is the amount you received in relation to your participation in the clinical trial assessable to you? | A1: No.

Relevant facts and circumstances: You recently participated in a clinical trial. The study program required you to attend a number of appointments. For your time, inconvenience, minor discomfort, parking and traffic costs you received a lump sum of $XXX. You had not participated in a clinical trial before and are unlikely to participate in another one in the future.

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

Reasons for decision: Summary: Subsection 6-5(2) of the Income Taxation Assessment Act 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 has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business. Other characteristics of income that have evolved from case law include receipts that: • are earned • are expected • are relied upon, and • have an element of periodicity, recurrence or regularity In your case you participated in a clinical trial. This is the first clinical trial you have participated in and you are unlikely to participate in one again in the future. It is not considered that your participation in the trial has the characteristics of a commercial undertaking. Also, the receipt was received as a lump sum rather than periodically and was not large in quantum. The amount you received is not considered to be ordinary income and is thus not assessable to you.