Private ruling: International income - foreign pension - exempt payments
Date of advice: 3 March 2023
Published: 24 April 2023
Ruling period: Income year ending 30 June 20XX | Income year ending 30 June 20XX | Income year ending 30 June 20XX | Income year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the Pension you receive from Country A assessable income? | A1: No. The payments you receive in relation to the Pension meet the principles contained in Taxation Ruling IT 2586 and satisfy the requirements for section 53-10 of the Income Tax Assessment Act 1997 (ITAA 1997) to apply to make the payments exempt from income tax. Therefore, your Pension will not be assessable under subsection 6-5(2) of the ITAA 1997.

Relevant facts and circumstances: You are a resident of Australia. You received a pension from Country A in relation to you being a member of their defence forces (the Pension). You were assessed by a government department in Country A as having a level of disablement from your service at a specified percentage, with the Pension being exempt from taxation in Country A. You lodged a private ruling application seeking a ruling decision on the taxation implications for you on the receipt of the Pension. A Notice of decision was issued which outlined that the Pension was not assessable income, with the ruling period ending on 30 June 20XX. You continued to receive the Pension under the same conditions after the ruling decision was issued until the present time, and for the purposes of this ruling will continue to receive the Pension under the same conditions until the end of the ruling period.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(2) | Income Tax Assessment Act 1997 Subsection 6-15(2) | Income Tax Assessment Act 1997 Section 11-5 | Income Tax Assessment Act 1997 Section 53-10 | Income Tax Assessment Act 1997 Section 52-65 | Income Tax Assessment Act 1936 Paragraph 23AD(3)(c)