Taxation Determination

TD 92/170

Income tax: are Household Support payments made under the States and Northern Territory Grants (Rural Adjustment) Act 1988, assessable income under subsection 25(1) or paragraph 26(g) of the Income Tax Assessment Act 1936 (ITAA)?

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FOI status:

may be releasedFOI number: I 1213433

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue.

1. No. Where the farmer signs an agreement to repay as a condition of receiving Household Support Assistance, the payments are then in the form of loan advances which are not assessable under subsection 25(1) of the ITAA. Loans are not assessable income.

2. The dominant purpose of Household Support is to assist non-viable farmers to leave the rural industry. If the farmer leaves the industry and the loan is converted to a grant, it remains non-assessable. Subsection 25(1) does not apply because the grant is not part of the proceeds of carrying on a business. Nor is it a bounty or subsidy received in, or in relation to, the carrying on of a business within the meaning of paragraph 26(g) of the ITAA.

Commissioner of Taxation

Previous Draft No. TD 92/D126


ATO references:

ISSN 1038 - 3158

Related Rulings/Determinations:

IT 2302

Subject References:
incentive payments

Legislative References:
ITAA 25(1);
ITAA 26(g);
States and Northern Territory Grants (Rural Adjustment) Act 1988

TD 92/170 history
  Date: Version: Change:
You are here 15 October 1992 Original ruling  
  7 December 2005 Withdrawn