Private ruling: Payments received on behalf of another person
Published: June 2013
Ruling period: Year ending 30 June 2013 Year ending 30 June 2014 Year ending 30 June 2015 Year ending 30 June 2016 Year ending 30 June 2017
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you assessable on the pension payment you receive on behalf of another person? | A1: No.

Relevant facts and circumstances: Person X receives government payments. You are Person X's payment nominee. As their payment nominee you: · receive payments on their behalf · expend the funds for their benefit, and · are required to keep records of the amounts received and spent. The payments are paid into a bank account, held in your name, but established solely for Person X's payments and expenses.

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

Reasons for decision: Summary: Subsection 6-5 of the Income Tax Assessment Act 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. There are situations where an entity (the agent) receives a payment on behalf of another person (the principal). This situation is referred to as an 'agency relationship'. In determining who is assessable on the payment, the ATO looks at who benefits from the payment. Generally, the person who benefits from the payment will be assessable on it. In your case, the payment nominee arrangement is considered to be an 'agency arrangement' with you as an agent and Person X as the principal. As you do not receive any personal benefit from the payments, it is Person X who is the recipient of the payments and not yourself. Therefore, the payments you receive on behalf of Person X do not form part of your assessable income.