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This edited version has been archived due to the length of time since original publication.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: 1012361601858

Subject: Capital gains tax - destruction of rental property - bank interest

Question:

Is the bank interest received ordinary income?

Answer:

Yes.

This ruling applies for the following period:

Year ended 30 June 2012

The scheme commenced on:

1 July 2011

Relevant facts:

You own a property that you use to produce income.

The property was destroyed by fire after 20 September 1985.

The property was insured and you received an amount as compensation for the destruction of the property as well as lost rental income.

You deposited the money into a bank account and received interest.

You rebuilt the property and incurred costs greater than the amount of compensation that you received.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 6-5

Income Tax Assessment Act 1997 Subsection 6-5(2)

Reasons for decision:

Subsection 6-5(2) of the Income Tax Assessment Act 1997 (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. 

Interest income is income according to ordinary concepts and is assessable under section 6-5 of the ITAA 1997. 

Whilst we appreciate your circumstances the Commissioner has no discretion to allow you to exclude the bank interest from your assessable income. 


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