Private ruling: Assessable income
Date of advice: 30 April 2021
Published: July 2021
Ruling period: Year ending 30 June YYYY | Year ending 30 June YYYY
Date scheme commenced: DD/MM/YYYY

Ruling: Q1: Is the lump sum amount payable under section 61 of the Return to Work Act 2014 (SA) (RWA) assessable as a capital gain? | A1: No. The lump sum payment is capital in nature. Pursuant to subparagraph 118-37(1)(a)(ii) of the Income Tax Assessment Act 1997 (ITAA 97), any capital gain or capital loss made from the lump sum amount will be disregarded. | Q2: Is the lump sum amount payable under section 61 of the RWA assessable as ordinary income? | A2: No. Having considered the circumstances and relevant factors, the lump sum amount is not in respect of, or in relation to, any income producing activity so the lump sum amount is not ordinary income under section 6-5 of the ITAA 97.

Relevant facts and circumstances: The deceased passed away on DD/MM/YYYY. The applicant is the spouse of the deceased. The applicant is entitled to compensation payable under section 61 of the Return to Work Act 2014 (SA) and clause 45(3) of the Return to Work Act Transitional Provisions .

Relevant legislative provisions: Income Tax Assessment Act 1997 subparagraph 118-37(1)(a)(ii) | Income Tax Assessment Act 1997 section 6-