ATO Interpretative Decision
ATO ID 2002/429 (Withdrawn)
Income Tax
Assessability of UK War Widows PensionFOI status: may be released
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This ATO ID is withdrawn as it is superseded by ATO ID 2008/6.This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 taxpayer assessable under subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) on their United Kingdom (UK) War Widows Pension?
Decision
No. The taxpayer is not assessable under subsection 6-5(2) of the ITAA 1997 on their UK War Widows Pension as it is exempt from tax under section 53-20 of the ITAA 1997.
Facts
The taxpayer is a resident of Australia.
The taxpayer's spouse was a member of the UK armed forces who was discharged at the end of the Second World War.
The taxpayer's spouse has since died as a result of a condition contracted while a member of the armed forces.
The taxpayer is now entitled to receive a War Widows Pension.
Reasons for Decision
Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.
Section 6-15 of ITAA 1997 provides that if an amount is exempt income, it will be excluded from assessable income. Section 6-20 of the ITAA 1997 specifies that an amount of ordinary income is exempt income if it is made exempt from income tax by a provision of the ITAA 1997 of another Commonwealth law.
Section 53-20 of the ITAA 1997 provides that payments made by the Government of the United Kingdom are exempt from tax in Australia if the payments are similar to payments under the Veterans' Entitlements Act 1986 that are exempt under Subdivision 52-B of the ITAA 1997; or payments similar to payments that are made because of the Veterans' Entitlements (Transitional Provisions and Consequential Amendments) Act 1986 and are exempt under subdivision 52-C of the ITAA 1997.
Section 52-65 of the ITAA 1997 contains a list of pensions or other payments made under the Veterans' Entitlements Act. Item 10.1 lists pensions for defence-caused death or incapacity as exempt.
The War Widows Pension the taxpayer receives from the United Kingdom is similar to the pension for defence caused death or incapacity paid under the Veterans' Entitlement Act which is listed as an exempt payment in Subdivision 52-B of the ITAA 1997. Therefore this pension income is exempt from tax in Australia under section 53-20 of the ITAA 1997 and does not form part of the assessable income of the taxpayer under subsection 6-5(2) of the ITAA 1997.
Date of decision: 4 October 2001Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1997
subsection 6-5(2)
section 6-15
section 6-20
Subdivision 52-B
Subdivision 52-C
section 52-65
section 53-20
The Act Veterans' Entitlement (Transitional Provisions and Consequential Amendments) Act 1986
The Act
Keywords
Foreign pension income
Exempt income
Foreign pension
Widows pension
Veterans payments
ISSN: 1445-2782
| Date: | Version: | |
| 4 October 2001 | Original statement | |
| You are here | 11 January 2008 | Archived |