The Commissioner has released Class Ruling 2010/23 which outlines the ATO opinion on the assessability of the Queensland Health Bonded Medical Scholarship.
I have received a Queensland Health Bonded Medical Scholarship. Should I include it on my income tax return?
The portion of the scholarship that relates to the Education Support Allowance is assessable and should be included in your income tax return for the year in which you received it.
The portion that relates to tuition fees, and is paid direct to the University, is not assessable to you and does not need to be included.
I have not lodged an income tax return for the year or years in question. Must I do so?
Yes, because the Education Support Allowance is assessable income, you should lodge an income tax return for each year, as soon as possible.
I lodged an income tax return for those years but did not include the scholarship amount. What should I do?
You must lodge an amendment request to include the amount you received from the scholarship.
However, there are time limits for requesting an amendment and we cannot amend an assessment if the time limit has passed. For individuals and small businesses the time limit is generally two years from the day that the Commissioner issued your original notice of assessment.
If I lodge an income tax return now, or request an amendment, will I be penalised?
When you lodge an amendment request or late return, the following penalties and interest may be automatically imposed:
- tax shortfall penalty
- shortfall interest charge (SIC)
- failure to lodge (FTL) penalty
- general interest charge (GIC).
The ATO has determined that none of these penalties or interest charges should apply to scholarship recipients who lodge amendment requests or late income tax returns as a result of the decision in this class ruling. If any of these penalties or interest charges are imposed, you can ask for them to be remitted (withdrawn).
When seeking remission of these penalties and interest charges, include a copy of this document.
If I receive an amended assessment showing a tax liability, can I pay that tax debt off over time?
If you incur a tax liability as a result of amending your assessment, you may contact the ATO to discuss a payment plan if required. Each request is considered on its own merits.
The ATO Receivables Policy outlines the Commissioner's position regarding payment arrangements. It states:
16. Taxpayers paying by instalments are expected to finalise their debts in the shortest possible timeframe. However, the Tax Office acknowledges there will be instances where that timeframe may extend beyond one, two or more financial years depending on factors such as the ability to pay, the size of the debt and the likely costs of alternative collection activity.
Can Queensland Health object to the class ruling on my behalf?
No, Queensland Health cannot object to the class ruling because, although they were the applicant for the class ruling, they are not a member of the class of taxpayer affected by the ruling.
Can I lodge an objection or seek a review of the class ruling?
Class rulings are a type of public ruling and because they are not given in relation to an individual taxpayer, no right of objection exists against them. If a taxpayer is affected by a public ruling, they can apply for a private ruling on the same subject matter and, if the private ruling is adverse, object against the private ruling.
Last Modified: Thursday, 13 January 2011