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This edited version has been archived due to the length of time since original publication.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

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Edited version of your private ruling

Authorisation Number: 1012560540214

Ruling

Subject: Foreign income

Question and answer:

Are the pension payments received by you from the Government of Country Y assessable income?

Yes.

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

The scheme commenced on:

1 July 2009

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 are a resident of Australia for taxation purposes.

You received payments from the Government of Y.

You state that these payments were a pension paid by the Government of Country Y.

The pension was paid monthly into a bank account in Country Y.

Relevant legislative provisions:

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

Reasons for decision

Pension payments from the Government of Country Y are not dealt with specifically in Australian tax legislation. Therefore we need to turn to the general sections concerning income, and in your case, section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) is the appropriate section for consideration.

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of an Australian resident includes income according to ordinary concepts (ordinary income) derived directly or indirectly from all sources, whether in or out of Australia, during the income year.

Based on case law, it can be said that ordinary income generally includes receipts that:

In your case, the pension payments received by you from the Government of Country Y had the characteristics of ordinary income as the payment was expected by you, the payment was relied on by you, and an element of periodicity, recurrence or regularity is evident as the payment was paid to you on a monthly basis.

The payment is therefore ordinary income and is assessable under section 6-5 of the ITAA 1997 and should be declared in your tax return.

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