Private ruling: Foreign source income
Date of advice: 29 July 2015
Published: July 2015
Ruling period: Year ending 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019
Date scheme commenced: 1 July 2014

Ruling: Question and answer | Are you required to declare 50% of the interest derived on a term deposit held in joint names with your parent? | No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Your parent has a term deposit overseas. Your name is on the term deposit account for legal purposes only. You did not contribute to the funds held in the account and you do not receive any interest from this account. Your parent has provided a letter stating that you have not contributed to the funds and do not receive any of the interest.

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

Reasons for decision: Summary: Interest income is assessable as ordinary income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997). Taxation Determination TD 92/106 states that interest income on a joint bank account should be returned by the taxpayer who is beneficially entitled to the income. That entitlement depends on the beneficial ownership of the monies held in the account. The general presumption is that holders of accounts in joint names have joint beneficial ownership of the monies in equal shares, unless evidence is provided to the contrary. In your case, your name is on the term deposit account for legal purposes only. You have not contributed to any of the funds held in the account and you do not receive any of the interest. Your parent has provided a letter confirming that this is the situation. You are not the beneficial owner of the term deposit and you are therefore not required to declare any of the interest in your tax return.