Private ruling: Undeducted purchase price
Date of advice: 25 September 2015
Published: September 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: The scheme has commenced

Ruling: Q1: Are you entitled to a deductible amount in respect of your foreign pension? | A1: Yes, your annual deductible amount for the 2014-15 financial year has been calculated in accordance with subsection 27 H (2) of the Income Tax Assessment Act 1936 (ITAA 1936)

Relevant facts and circumstances: This ruling is based on the facts stated below. Any material variation from these facts (including any matters not stated in the description above and any departure from these facts) will mean that the ruling will have no effect. Where there is no variation, the ruling can apply for more than just the period/s mentioned above. You are a resident of Australia for income tax purposes Your pension is paid by a pension scheme established and managed outside Australia You have provided evidence which shows your personal contributions Your pension commenced on after 1 July 1983 and is payable for life You currently receive 100% of the pension Your pension is paid monthly. Assumptions No assumptions have been used in this ruling as it is given on the basis of the facts and circumstances stated above.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 27H | Income Tax Assessment Act 1936 Subsection 27H(2) | Income Tax Assessment Act 1936 Subsection 27H(4)

Reasons for decision: Summary: The part of your annual pension or annuity income which represents a return to you of your personal contributions is free from tax. The tax-free portion is called the deductible amount. It is calculated by dividing the UPP of your pension by either the term of the pension (if fixed), or a life expectancy factor - that applies to you or your spouse if they have a greater life expectancy - according to life expectancy statistics. The Australian life tables are published by the Australian Government Actuary, and the life expectancy is taken from when the pension first became payable. The annual deductible amount is calculated using the following formula: A (B - C) D A = relevant share of the pension payable to you (if all the pension is payable to you then A = 1) B = is the amount of the UPP of the pension, C = is the residual capital value (if any), D = is the relevant number | Detailed Reasoning - This ruling applies for the following period:: Year ended 30 June 2015 | Detailed Reasoning - The scheme commenced on:: The scheme has commenced | Detailed Reasoning - Relevant facts and circumstances: This ruling is based on the facts stated below. Any material variation from these facts (including any matters not stated in the description above and any departure from these facts) will mean that the ruling will have no effect. Where there is no variation, the ruling can apply for more than just the period/s mentioned above. You are a resident of Australia for income tax purposes Your pension is paid by a pension scheme established and managed outside Australia You have provided evidence which shows your personal contributions Your pension commenced on after 1 July 1983 and is payable for life You currently receive 100% of the pension Your pension is paid monthly. | Detailed Reasoning - Assumptions: No assumptions have been used in this ruling as it is given on the basis of the facts and circumstances stated above. | Detailed Reasoning - Relevant legislative provisions: Income Tax Assessment Act 1936 Section 27H Income Tax Assessment Act 1936 Subsection 27H(2) Income Tax Assessment Act 1936 Subsection 27H(4)