Private ruling: Assessable income and capital gain
Date of advice: 1 November 2019
Published: January 2020
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Is the pecuniary penalty you received assessable income? | A1: No | Q2: Is the pecuniary penalty you received disregarded as a capital gain under section 118-37(1)(a) of the Income Tax Assessment Act 1997 ? | A2: Yes

Relevant facts and circumstances: You received a court order for a payment consisting of your former employer's failure to pay underpaid wages, failure to pay for notice of termination and failure to pay accrued leave on termination. You also received a court order for a separate payment consisting of a pecuniary penalty to be paid by your former employer pursuant to section 546(1) of the Fair Work Act 2009 (Cth).

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-37(1)(a)