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Edited version of your written advice
Authorisation Number: 1012846646657
Date of advice: 24 July 2015
Ruling
Subject: Assessability of interest income.
Question
Is the interest income from the accounts held 'in trust' for your disabled relative assessable income to you where you are the trustee for the account?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2014
Year ended 30 June 2015
Year ended 30 June 2016
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You are the financial guardian and hold Power of Attorney for your disabled relative.
You have control of two bank accounts with the account name of yourself ATF your relative.
These accounts were opened in your name as your relative was unable to attend a bank branch.
These accounts are used solely for the purpose of looking after your relative's personal finances, including all day to day expenses and purchases.
These accounts generate interest which forms part of the funds available for the sole purpose of looking after your relative's finances.
Centrelink deems the interest accrued in these accounts as part of your relative's income in the calculation of their payments.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Reasons for decision
The liability to taxation on interest income is subject to the principles of common law and the law of equity, modified by any relevant legislation, including the Income Tax Assessment Act 1997. A taxpayer is liable to taxation on the interest income where the taxpayer has beneficial entitlement to the monies in the account.
In the account in your name ATF your relative, the funds in the account are only used for the purposes of meeting your relative's expenses. Your relative has sole beneficial entitlement to the monies in the account and will be assessable on the interest income that is derived in the account.
You are not assessable on the interest income in the account where you act in the role of trustee because you hold Power of Attorney and financial guardianship.
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