Private ruling: Assessable income-foreign pension
Date of advice: 19 April 2023
Published: 5 June 2023
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is a social security payment received from Country X included in your assessable income in your capacity as trustee for your child under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year. Article X of the Country X Agreement provides that social security payments by Country X to a resident of Australia shall only be taxed in Country X. Accordingly, the social security payment received is therefore not assessable income under section 6-5 of the ITAA 1997 as you are a resident of Australia.

Relevant facts and circumstances: Your child is X years old. Your child is an Australian citizen. The relevant department in Country X advised you that your child is eligible to receive a payment. Your child will be eligible to receive the payment until they are X years old. This payment will be approximately $XXX per month. This payment will be made to a representative payee through an in-trust account in Australia. The payments will be audited to ensure that the money is only for your child's benefit.

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