Private ruling: Assessability of bank error
Published: January 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 13 September 2004

Ruling: Q1: Are monies incorrectly transferred to you as a result of a bank error assessable in the 2010-11 financial year? | A1: No


Relevant legislative provisions: Income Tax Assessment Act 1997 section 393-10(1)

Reasons for decision: Summary: Monies that would normally constitute income upon receipt were transferred into your account as a result of a bank error. The bank had no authority to make such a transfer, a fact it subsequently acknowledged before effectively remedying the error. The amount incorrectly transferred and subsequently remedied will not be assessable for the 2010-11 financial year.

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: You deposited funds into a term deposit with a financial institution in 2004. | The deposit has been rolled over each year on the date of deposit, with the latest rollover being in the 2010-11 financial year. | You have provided documentation showing that you submitted a withdrawal notification to the financial institution in late June 2011 advising that you wished to withdraw the funds from this account in early July 2011, thereby closing the term deposit on this date. | The financial institution incorrectly withdrew the funds in late June 2011 and deposited the amount into your account. | In correspondence with the financial institution they advised it was an administrative error and the deposit statement will show that the funds were withdrawn in early July as intended. | The financial institution paid you interest for a period calculated from the deposit rollover date in the 2010-11 financial year to the date you intended for the repayment to be made in early July 2011. | You have received confirmation that the financial institution did not report any repayment amount in respect of your term deposit for the year ended 30 June 2011.