Document ID: chunk:federal_register_of_legislation:C2025C00014:section:27h:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 27H (pt 1/4)
Character Range: 262078–264727

27H  Assessable income to include annuities and superannuation pensions
 (1) Subject to Division 54 of the Income Tax Assessment Act 1997, the assessable income of a taxpayer of a year of income shall include:
 (a) the amount of any annuity derived by the taxpayer during the year of income excluding, in the case of an annuity that has been purchased, any amount that, in accordance with the succeeding provisions of this section, is the deductible amount in relation to the annuity in relation to the year of income; and
 (b) the amount of any payment made to the taxpayer during the year of income as a supplement to an annuity, whether the payment is made voluntarily, by agreement or by compulsion of law and whether or not the payment is one of a series of recurrent payments.
Note: Division 54 of the Income Tax Assessment Act 1997 provides a tax exemption for certain payments under structured settlements and structured orders.
 (2) Subject to subsections (3) and (3A), the deductible amount in relation to an annuity derived by a taxpayer during a year of income is the amount (if any) ascertained in accordance with the
  formula , where:
A  is the relevant share in relation to the annuity in relation to the taxpayer in relation to the year of income.
B  is the amount of the undeducted purchase price of the annuity.
C  is:
 (a) if there is a residual capital value in relation to the annuity and that residual capital value is specified in the agreement by virtue of which the annuity is payable or is capable of being ascertained from the terms of that agreement at the time when the annuity is first derived—that residual capital value; or
 (b) in any other case—nil; and
D  is the relevant number in relation to the annuity.
 (3) Subject to subsection (3A), where the Commissioner is of the opinion that the deductible amount ascertained in accordance with subsection (2) is inappropriate having regard to:
 (a) the terms and conditions applying to the annuity; and
 (b) such other matters as the Commissioner considers relevant;
the deductible amount in relation to the annuity derived by the taxpayer during the year of income is so much of the annuity as, in the opinion of the Commissioner, represents the undeducted purchase price having regard to:
 (c) the terms and conditions applying to the annuity;
 (d) any certificate or certificates of an actuary or actuaries stating the extent to which, in the opinion of the actuary or actuaries, the amount of the annuity derived by the taxpayer during the year of income represents the undeducted purchase price; and
 (e) such other matters as the Commissioner considers relevant.