Private ruling: Assessable income
Date of advice: 16 December 2016
Published: May 2017
Ruling period: Year ending 30 June 201X | Year ending 30 June 201X | Year ending 30 June 201X | Year ending 30 June 201X | Year ending 30 June 201X | Year ending 30 June 201X | Year ending 30 June 201X
Date scheme commenced: 1 July 20X0

Ruling: Q1: Are the payments you receive for repayment of a family arrangement assessable? | A1: No.

Relevant facts and circumstances: In 20X0 you loaned your child an amount of money which was used to assist with the purchase of a property. The mortgage and title deed is in the name of your child. This property is now being used as an investment property, deriving rental income. You have a family arrangement with your child to receive repayments for the amount you loaned to assist with the property purchase.

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) provides that the assessable income of an Australian resident includes all ordinary income derived directly or indirectly from all sources. Rental income is regarded as ordinary income and forms part of a taxpayer's assessable income. It is the owner of the property that receives rental income that is assessable on the rental income. In this case, you do not have any ownership interest in the property that derives rental income. The amounts you receive are for repayment of a family arrangement and are not rental income. You are not assessable on the payments you receive for repayment of a family arrangement.