ATO Interpretative Decision
ATO ID 2002/101 (Withdrawn)
Income Tax
Assessability of prizes from investment-related sweepstake conducted by a bankFOI status: may be released
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This ATO ID is a simple restatement of the law and does not contain an interpretative decision.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the amount won from a sweepstake conducted by a bank included in the taxpayer's assessable income under section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
Yes. The amount won from a sweepstake held by a bank is included in the taxpayer's assessable income under section 6-10 of the ITAA 1997 as it is statutory income under section 26AJ of Income Tax Assessment Act 1936 (ITAA 1936).
Facts
The taxpayer opened a bank account.
As a bank account holder, the taxpayer was able to complete a customer survey form. The customer survey form was entered into a sweepstake competition conducted by the bank.
The taxpayer's customer survey form was randomly selected as a prize winner in the sweepstake.
Reasons for Decision
Section 6-10 of the ITAA 1997 provides that a taxpayer's assessable income includes statutory income amounts that are not ordinary income but are included in assessable income by another provision.
Section 10-5 of the ITAA 1997 lists provisions about assessable income. Included in the list is section 26AJ of the ITAA 1936 which deals with investment-related lottery winnings, including cash prizes. The effect of subsection 26AJ(1) of the ITAA 1936 is that where an amount is paid to a taxpayer and:
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- the payment is by way of winnings from betting, lottery or another form of gambling or game with prizes,
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- the chance to participate in, for example the lottery, was provided wholly or partly in respect of an investment held by the taxpayer in or with an investment body, and
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- the lottery or game was organised by the investment body
then the amount received by the taxpayer is included in their assessable income.
The taxpayer received the amount as winnings from a sweepstake which was organised by the bank. The chance to participate in the sweepstake was provided wholly in respect of an investment the taxpayer held with the bank. The amount received by the taxpayer meets the requirements of subsection 26AJ(1) of the ITAA 1936. This amount is therefore statutory income and is included in the taxpayer's assessable income under section 6-10 of the ITAA 1997.
Date of decision: 23 October 2001Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1936
section 26AJ
subsection 26AJ(1)
section 6-10
section 10-5
Keywords
Foreign income
Foreign investment funds
Government bonds
Investment related lottery winnings
Lottery winnings
Prizes and awards
ISSN: 1445-2782
| Date: | Version: | |
| 23 October 2001 | Original statement | |
| You are here | 30 April 2010 | Archived |