Private ruling: G rants received by auspicor on behalf of grantee
Date of advice: 30 March 2026
Published: 22 June 2026
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the grant you received as an Auspicor from the Department of Infrastructure, Transport, Regional Development, Communications and the Arts be assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No | Q2: Will the grant you received as Auspicor the Department of Infrastructure, Transport, Regional Development, Communications and the Arts be assessable income under section 15-10 of the ITAA 1997? | A2: No

Relevant facts and circumstances: You are a sole trader. You have an ABN and are registered for GST. You first met XXXXX (the grantee) for the XXXXX of X (company) in 20XX. You began working together with the grantee towards the end of 20XX as the programmer and producer for the company at the Edinburgh fringe 20XX. The role involved the producing and marketing of Australian shows in a city for the company. You suffered psychological abuse working for the company and felt pressured to auspice the grant. The grantee told you that if you didn't, there would be no way for the company to access these much-needed funds. You felt intimidated and agreed. You have never been an Auspicor prior. You received a grant of money (the grant) pursuant to a written Commonwealth Grant Agreement (the agreement) dated 28 June 20XX, between the Commonwealth represented by Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DIT) and you as a Auspicor on behalf of the company and the grantee. Under clause D of the agreement the total amount of the grant is $XXXXXX plus GST and the grantee must ensure that the grant is held in an account in the grantee's name and which the Grantee controls, with an authorised deposit-taking institution authorised under the Banking Act 1959 (Cth) to carry on banking business in Australia. On 28 July 20XX the funds were deposited into your account from DIT, account name XXXXXXX account number ending in XXX, to the amount of $XXXXXX. That same day you transferred $XXXXXX to account ending in XXXX, with the description grant auspicing. Under 8.1 of the general grant terms, the Commonwealth agrees to pay the Grant to the Grantee in accordance with the Grant Details. Under clause B of the agreement it states that the grant will support the participation of Australian performing artists at the 20XX Edinburgh Festival Fringe. Under the general grant conditions of the deed the Grantee agrees to spend the Grant for the purpose of undertaking the Activity only pursuant to clause 9.1. The Grantee has submitted an International Cultural Diplomacy Fund Final Report (the final report) containing audited acquittal reports to the Commonwealth body showing all activity and reported no remaining balance of the grant funds at the end of the authorised project. You have submitted a signed Auspice acquittal certification form, this form is for the Auspice Body to certify the final report.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 15-10

Reasons for decision: Summary: Question 1 Will the grant received by you as an Auspicor from the Department of Infrastructure, Transport, Regional Development, Communications and the Arts be assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? The grant received by you in your capacity as Auspice Body does not constitute ordinary income under section 6-5 of the ITAA 1997. You received the funds on behalf of the grantee under a formal auspicing arrangement and did not derive the grant for your own benefit. The funds were not received as remuneration for services, were not retained by you, and were not available for your general use. Accordingly, the grant is not assessable as ordinary income. | Detailed Reasoning - Detailed reasoning: Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources during the income year. Amounts are assessable as ordinary income if they have the character of income according to ordinary concepts. Ordinary income generally falls within one of three categories: • income from rendering personal services • income from property, or • income from carrying on a business Other indicators identified by case law include whether the receipt is earned, expected, relied upon, and whether it has an element of periodicity or recurrence. A payment received in consideration for the performance of services is generally income ( Hayes v FCT (1956) 96 CLR 47). The Commissioner's view on the accessibility of government payments is set out in TR 2006/3. Paragraph 12 of that Ruling states that where a government payment is provided to assist an entity with its business operating costs or liabilities, the payment will generally be ordinary income and assessable under section 6-5. However, for an amount to be assessable under section 6-5, it must first be derived by the taxpayer. A taxpayer will not derive ordinary income unless they are beneficially entitled to the amount. Amounts received in a mere agency, trustee or conduit capacity are not derived by the recipient for income tax purposes. Application to your circumstances In your case, the grant was paid by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts to support the participation of Australian performing artists at the 20XX Edinburgh Festival Fringe. You entered into the funding deed as an Auspice Body on behalf of the company and the grantee. Under the deed and general grant conditions: • the grant was required to be used solely for the authorised activity • you were not entitled to apply the funds for your own purposes • you were required to facilitate the receipt and transfer of the funds to the grantee • you were required to certify the acquittal of the grant, rather than undertake the funded activity yourself Although the grant monies were paid into your bank account, you transferred the full amount to the grantee on the same day and did not retain any part of the grant funds. You did not receive the grant as consideration for services you provided. Any income you earned in your role as programmer or producer was received separately as salary, wages, or fees and was not funded directly by the grant. While the project was related to activities within your broader professional experience, the grant was not paid to you to support your business, reduce your operating costs, or supplement your income. Rather, you acted as an intermediary to enable the grantee to access Commonwealth funding. Accordingly, you did not derive the grant for your own benefit. The grant lacks the character of ordinary income in your hands and is therefore not assessable under section 6-5 of the ITAA 1997. Please note that if the grant was not assessable as ordinary income, the grant would be assessable under section 15-10 of the ITAA 1997. Section 15-10 of the ITAA 1997 includes in assessable income, bounties and subsidies that you receive in relation to carrying on a business that are not assessable as ordinary income under section 6-5 of the ITAA 1997. | Detailed Reasoning - Question 2: Will the grant received by you as Auspicor the Department of Infrastructure, Transport, Regional Development, Communications and the Arts be assessable income under section 15-10 of the ITAA 1997? | Summary: No. The grant is not assessable under section 15-10 of the ITAA 1997 because it was received by you solely as Auspice Body on behalf of the grantee and not in relation to your own business activities. You did not derive the grant for your own benefit or use it to subsidise your business expenses. | Detailed Reasoning - Reasons for decision: Section 15-10 of the ITAA 1997 includes in assessable income certain government payments and subsidies that are not ordinary income, where the payment is received in relation to the carrying on of a business. For section 15-10 to apply, the payment must be: • a bounty or subsidy • received in relation to carrying on a business, and • derived by the taxpayer for their own benefit In your circumstances, although the grant constitutes a government payment, it was not received by you in relation to your own business activities. You received the funds solely in your capacity as auspice body on behalf of the grantee and were required to pass the funds on in full. You did not retain the grant, use it to subsidise your business expenses, or apply it to your own business operations. As the grant was not derived by you and was not received to support your business, it does not fall within the scope of section 15-10. Accordingly, the grant is not assessable under section 15-10 of the ITAA 1997.