ATO Interpretative Decision

ATO ID 2001/770

Income Tax

Foreign Deceased Spouse Pension - deceased Consular
FOI status: may be released

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 foreign deceased spouse pension received by a taxpayer assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

Yes. The foreign deceased spouse pension received by the taxpayer is assessable under section 6-5 of the ITAA 1997.

Facts

The taxpayer was born overseas and is currently an Australian resident receiving a foreign deceased spouse pension. The pension does not contain an age pension component.

The taxpayer is the spouse of a deceased Consular.

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. However, if an amount is exempt income it is not included in the assessable income of a taxpayer (section 6-15 of the ITAA 1997).

The Consular Privileges & Immunities Act 1972 (CPIA) gives domestic legal effect to the agreements Australia has made as a party to the Vienna Convention on Consular Relations (the Convention). Specifically, subsection 5(1) of the CPIA gives effect to Article 49 of the Convention, which concerns the exemption of income from taxes. Subsection 5(4) of the CPIA provides that the exemption from tax on income applies for years commencing on or after 1 July 1972. Article 49 of the Convention makes reference to exemption from income tax for all consular officers and employees and members of their families forming part of their households but with the exception of tax on private income.

As the taxpayer's spouse is no longer a Consular or a member of the Consular staff, the exemption will not apply to the pension of the taxpayer. Therefore, the pension income received by the taxpayer is assessable income under section 6-5 of the ITAA 1997.

Date of decision: 23 August 2001

Year of income: Year ended 30 June 1999 Year ended 30 June 2000

Legislative References:
Income Tax Assessment Act 1997
   section 6-5
   subsection 6-5(2)
   section 6-15

Consular Privileges and Immunities Act 1972
subsection 5(1)
subsection 5(4)

Other References:
Vienna Convention on Consular Relations Article 49

Keywords
Foreign pension
Foreign pension income
Diplomatic privileges and immunities

Siebel/TDMS Reference Number: DW225521

Business Line: Small Business/Individual Taxpayers

Date of publication: 7 December 2001

ISSN: 1445-2782

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