ATO Interpretative Decision
ATO ID 2002/503 (Withdrawn)
Income Tax
Assessability of proceeds from a foreign life assurance policy where taxpayer has no legal title to policyFOI status: may be released
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This ATO ID is withdrawn because it contains a view in respect of provisions of the Income Tax Assessment Act 1936 that don't apply after the 2009-10 income year. Despite its withdrawal, this ATO ID continues to be a precedential view in respect of decisions for income years up to, and including the 2009-10 income year.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Are the benefits received by resident taxpayer from a foreign life assurance policy (FLP), which the taxpayer does not have an interest in, included in assessable income under section 529 of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
No. The benefits received by a resident taxpayer from a FLP which the taxpayer does not have an interest in, are not included in assessable income under section 529 of the ITAA 1936.
Facts
The taxpayer is an Australian resident for income tax purposes.
A relative, who was a non-resident of Australia, passed away and the taxpayer received a monetary benefit from the life assurance policy of the deceased relative.
Under the revenue laws of the foreign country in which the life assurance policy was written, any tax liability on the termination of the life assurance policy will be that of the deceased relative.
Reasons for Decision
Section 529 of the ITAA 1936 provides that the assessable income of an Australian resident taxpayer includes foreign investment fund income that accrues to a taxpayer who has an interest in a FLP.
Subsection 483(3) of the ITAA 1936 provides that a person has an interest in a FLP if the person has legal title to the policy.
The taxpayer did not have an interest in the deceased relative's life assurance policy as the deceased relative was the insured under the policy and therefore had legal title.
Accordingly, the benefits the taxpayer received from the FLP are not included in assessable income under section 529 of the ITAA 1936.
Date of decision: 12 October 2001Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1936
subsection 483(3)
section 529
Keywords
Foreign life assurance policies
ISSN: 1445-2782
| Date: | Version: | |
| 12 October 2001 | Original statement | |
| You are here | 4 March 2011 | Archived |