Private ruling: Income tax - foreign investments
Date of advice: 8 April 2026
Published: 29 June 2026
Ruling period: Year ending 30 June 2026
Date scheme commenced: 1 July 2025

Ruling: Q1: Are interest earnings credited to your Provident Fund Account while you are an Australian resident for tax purposes assessable income during the 202X - 202Y income year? | A1: No. | Q2: Are bonuses credited to your Life Assurance Policy while you are an Australian resident for tax purposes assessable income during the 202X - 202Y income year? | A2: No.

Relevant facts and circumstances: You came from Country A to live in Australia for work during MM YYYY. You are an Australian resident for tax purposes. You hold a foreign xx Fund investment which earns yearly interest. You have not received a distribution from the fund investment during 202X - 202Y. You also hold a foreign Life Assurance Policy. The start date (or the 'date of commencement date of risk') of the policy was XX XXX 201X. The policy receives bonuses. The policy has not been redeemed nor reached maturity in 202X - 202Y.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 26AH | Income Tax Assessment Act 1936 section 99B | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-10 | Income Tax Assessment Act 1997 section 15-75

Reasons for decision: Summary: No. Interest earnings credited to your fund account while you are an Australian resident for tax purposes are not assessable income during the 202X - 202Y income year. | Detailed Reasoning - Detailed reasoning: Section 6-5 and section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provide that the assessable income of a resident taxpayer includes ordinary and statutory income derived directly and indirectly from all sources during the income year. Ordinary income has generally been held to include three categories, namely income from rendering personal services, income from property and income from carrying on a business. Further, section 99B of the Income Tax Assessment Act 1936 (ITAA 1936) deals with the receipt of trust amounts or distributions that have not previously been subject to tax in Australia. It applies where an Australian resident for tax purposes receives an amount from a foreign trust. As you have not received a distribution from your foreign fund investment during 202X - 202Y, the interest earnings credited to the account are not assessable under either section 6-5 or section 99B of the ITAA 1936 in the ruling period. | Detailed Reasoning - Question 2: Are bonuses credited to your foreign Life Assurance Policy while you are an Australian resident for tax purposes assessable income during the 202X - 202Y income year? | Summary: No. Bonuses that are credited to your foreign Life Assurance Policy while you are an Australian resident for tax purposes are not assessable income during the 2026 - 202Y income year. | Detailed Reasoning - Detailed reasoning: Bonuses received on a policy of life assurance are not income according to ordinary concepts and are therefore not assessable income for the purposes of section 6-5 of the ITAA 1997. However, section 15-75 of the ITAA 1997 provides that a taxpayer's assessable income includes any amount received as or by way of bonus on a life insurance policy, other than a reversionary bonus. A reversionary bonus is a bonus received on surrender or maturity of a life policy. Section 26AH of the ITAA 1936 operates to include certain reversionary bonuses from life assurance policies in assessable income if they would not otherwise be included. However, an amount will only be assessable where an eligible policy is redeemed within 10 years of the commencement date of the risk. Further, Taxation Ruling IT 2346 Income Tax: bonuses paid on certain life assurance policies - section 26AH - interpretation and operation at paragraph 7 provides further explanation to the meaning of the word ' received': Section 26AH primarily applies to amounts actually received by a taxpayer as or by way of a bonus under an eligible policy. However, subsection 26AH(4) operates, subject to subsection 26AH(5), to ensure that where an amount of bonus is dealt with on behalf of or at the direction of the taxpayer, he or she is taken to have received that amount. It is important to note, however, that the mere crediting of a bonus to a policy of life assurance is not to be taken as the receipt by the taxpayer of the bonus. In this regard, subsection 26AH(5) provides that subsection 26AH(4) does not apply to a bonus or similar amount that is applied to increase the surrender or maturity value of a life assurance policy. In your case, you acquired the foreign Life Assurance Policy in 201X and the policy is not being redeemed within X years of the commencement date. Bonuses credited to the policy during 202X - 202Y are not yet considered to have been 'received'. As per IT 2346, bonuses applied during 202X - 202Y which simply increase the surrender or maturity value of the policy are not assessable income under section 15-75 of the ITAA 1997 in the ruling period.

Question 1: Are interest earnings credited to your foreign xx Central Provident Fund account while you are an Australian resident for tax purposes assessable income during the 202X - 202Y income year?