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Edited version of private ruling
Authorisation Number: 1011643871262
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Ruling
Subject:
The annual deductible amount of the Undeducted Purchase Price (UPP) of your foreign pension.
Question
Are you entitled to an annual deductible amount in respect of the undeducted purchase price (UPP) of your foreign pension?
Answer
No.
The scheme commenced
Prior to 1 July 1983
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You receive a pension from a retirement fund established and managed outside Australia.
TD 93/227 applies to pensions commencing prior to 1 July 1983 and operates in conjunction with former section 26AA of the Income Tax Assessment act 1936 (ITAA 1936).
The international tax agreement between Australia and Germany in which the retirement fund is established and managed provides that the pension is taxable in Australia.
Your assessable income includes your pension income.
All the pension is payable to you.
The pension became payable prior to 1 July 1983
The pension commenced in 1956
The pension is payable for life, and reverted to you on the death of your spouse.
Relevant legislative provisions
Former section 26AA of the ITAA 1936
Former section 26AA(2)(a) of the ITAA 1936
Reasons for decision
While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.
TD 93/227 states that pensions commencing prior to 1 July 1983 are subject to former section 26AA 1936 of the ITAA 1936 and to be entitled to a deduction a person needs to have made the contributions themselves.
TD 93/227 further states that that person receiving a pension arising from the death of the original pensioner cannot claim a deduction for the UPP as they would not have personally contributed to the purchase price of the pension.
In your case, you are not entitled to a deductible amount because you have not personally contributed to the fund.
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