ATO Interpretative Decision

ATO ID 2002/592 (Withdrawn)

Income Tax

• ATO ID 2002/592 is withdrawn from the database because, following legislative changes which became effective on 14 September 2006, it is no longer current for years of income happening on or after 30 June 2006. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions dealing with the application of subparagraph 23(kca)(iii) of the ITAA 1936 occurring before that date. An ATO ID dealing with the replacement legislation will issue shortly.
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Issue

Is the taxpayer, a resident of Australia, assessable under subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) on a war time persecution pension received from Austria?

Decision

No. The taxpayer, a resident of Australia, is not assessable under subsection 6-5(2) of the ITAA 1997 on a war time persecution pension received from Austria as it is exempt income under subparagraph 23(kca)(iii) of the Income Tax Assessment Act 1936 (ITAA 1936).

Facts

The taxpayer is a resident of Australia.

The taxpayer is entitled to a pension from the Austrian government as a victim of National Socialist (Nazi) persecution during World War II.

Reasons for Decision

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident of Australia includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.

Pension payments are ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.

However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income it is not assessable income.

Paragraph 23(kca) of the ITAA 1936 provides that certain pensions, annuities and allowances will be exempt. Subparagraph 23(kca)(iii) of the ITAA 1936 provides that a pension, annuity or allowance will be exempt where it is made under a law, other than a law of the Commonwealth, State or Territory and:

•

relates to, or takes into account, the persecution, during World War II of the recipient or another person by forces of an enemy of the Commonwealth, or flight from such persecution (subsubparagraph 23(kca)(iii)(A) of the ITAA 1936); or

•

relates to a disability arising out of the participation of the recipient or another person in a resistance movement during World War II against forces of an enemy of the Commonwealth (subsubparagraph 23(kca)(iii)(B) of the ITAA 1936).

The pension paid to the taxpayer is made under a law of Austria. The pension was paid as a result of the persecution by forces of an enemy of the Commonwealth (ie the Nazis) of the taxpayer during World War II.

Therefore, the taxpayer's pension falls within the meaning of subparagraph 23(kca)(iii) of the ITAA 1936 and is exempt from tax in Australia. Accordingly, the pension is not included in the taxpayer's assessable income under subsection 6-5(2) of the ITAA 1997.

Year of income:  Year ended 30 June 1998 Year ended 30 June 1999 Year ended 30 June 2000 Year ended 30 June 2001 Year ending 30 June 2002

Legislative References:
Income Tax Assessment Act 1936
   paragraph 23(kca)
   subparagraph 23(kca)(iii)
   subsubparagraph 23(kca)(iii)(A)
   subsubparagraph 23(kca)(iii)(B)

Keywords
Exempt income
Lump sum payments in arrears
Foreign pension income
Austria

Business Line:  Small Business/Individual Taxpayers

Date of publication:  31 May 2002

ISSN: 1445-2782