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This edited version has been archived due to the length of time since original publication.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

Authorisation Number: 1012848651529

Date of advice: 27 July 2015

Ruling

Subject: Assessable income

Question

Is the amount you received in relation to your participation in the clinical trial assessable to you?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2015

The scheme commences on:

1 July 2014

Relevant facts and circumstances

You recently participated in a clinical trial.

The study program required you to attend a number of appointments.

For your time, inconvenience, minor discomfort, parking and traffic costs you received a lump sum of $XXX.

You had not participated in a clinical trial before and are unlikely to participate in another one in the future.

Relevant legislative provisions

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

Reasons for decision

Subsection 6-5(2) of the Income Taxation Assessment Act 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.

Ordinary income has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business.

Other characteristics of income that have evolved from case law include receipts that:

In your case you participated in a clinical trial. This is the first clinical trial you have participated in and you are unlikely to participate in one again in the future. It is not considered that your participation in the trial has the characteristics of a commercial undertaking. Also, the receipt was received as a lump sum rather than periodically and was not large in quantum. The amount you received is not considered to be ordinary income and is thus not assessable to you.

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