Private ruling: Assessibility of NRAS incentive payments to the Investor
Date of advice: 20 July 2018
Published: September 2018
Ruling period: 1 July 2XXX – 30 June 2XXX
Date scheme commenced: 1 July 2XXX

Ruling: Q1: Will any NRAS incentives received by you indirectly through a National Rental Affordability Scheme (NRAS) approved participant, in relation to your NRAS dwelling, constitute assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes Accordingly, the payment made to you indirectly through the NRAS consortium (in accordance with the terms of the Deed of Agreement) in relation to your participation in the NRAS will not be assessable income under section 6-5 of the ITAA 1997, or any other provision of that Act.

Relevant facts and circumstances: The Investor owns a property (the Dwelling) which is an ‘approved rental dwelling’ as defined in the National Rental Affordability Scheme Regulations 2008 (NRAS Regulations) and an ‘NRAS dwelling’ as defined in subsection 995-1(1) of the ITAA 1997. The Investor derives ‘NRAS rent’ from the Dwelling, which is tenanted by one or more ‘eligible tenants’ as defined in the NRAS Regulations. The Investor executed a Deed of Agreement to enable their participation in the NRAS for the ‘incentive period’, defined in the National Rental Affordability Scheme Act 2008 to mean 10 years, by virtue of the inclusion of the Dwelling in portfolio of properties made available to eligible tenants. There is an ‘approved participant’ for the purposes of the NRAS Regulations and an ‘NRAS approved participant’ as defined in subsection 995-1(1) of the ITAA 1997. The approved participant receives any NRAS tax offset and State or Territory NRAS incentive payment provided in respect of the Dwelling (the NRAS incentives). The Investor commenced receipt of the NRAS incentives in the year ended 30 June 2XXX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 6 | Income Tax Assessment Act 1997 Subsection 6-1(5) | Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Subsection 6-15(3) | Income Tax Assessment Act 1997 Section 6-23 | Income Tax Assessment Act 1997 Section 8(1 & 2) | Income Tax Assessment Act 1997 Division 380 | Income Tax Assessment Act 1997 Section 380-10 | Income Tax Assessment Act 1997 Section 380-35 | Income Tax Assessment Act 1997 Subsection 995-1(1) | National Rental Affordability Scheme Act 2008 | National Rental Affordability Scheme Regulations 2008