Private ruling: Interest income
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you assessable on your share of interest derived from funds from an insurance payout and relief fund which were held in a joint bank account? | A1: Yes.


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

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) specifies that residents of Australia are assessable on income derived from all sources in and out of Australia. While we acknowledge that the funds that produced the interest income was from a compensation because your home burnt down, the interest itself is derived from placing those funds into the bank account. Income derived from a bank account is considered ordinary income and therefore is assessable under section 6-5 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: Your family home was burnt to the ground and you received several insurance payments and a payment from a relief fund. | You placed the payment into a joint bank account and received interest on the account.