| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012172035484
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Interest income
Question
Is interest received on a frozen bank account assessable at the time that it is credited to the account by the bank?
Answer
Yes
This ruling applies for the following periods
Year ended 30 June 2009
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
1 July 2008
Relevant facts
You have a jointly owned bank account.
This account was frozen by the court.
You had no access to the bank account funds.
The financial institution paid monthly interest into the bank account.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Reasons for decision
Detailed reasoning
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that if you are an Australian resident, your assessable income includes the ordinary income you derived directly or indirectly from all sources during the income year. Interest income is considered to be ordinary income.
Taxation Ruling TR 98/1 covers the derivation of income and at paragraph 47 it is provided that interest is only derived, or arises, when it is received or credited.
In your case the interest is ordinary income which is assessable in the year that the bank account was credited with the interest amounts. The fact that the bank account could not be accessed for a period of time does not alter the fact that the interest income is assessable in the year it was credited.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
