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Edited version of your written advice
Authorisation Number: 1051373107962
Date of advice: 16 May 2018
Ruling
Subject: Treatment of compensation payment
In order to protect the privacy and commercial in-confidence components of this private binding ruling the following summary is provided.
The Commissioner has ruled on each of the specific questions.
Question 1
Will any proceeds payable to The Company resulting from the litigation be assessable as ordinary income to The Trust under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
No. Refer to Reasons for Decision. Any proceeds which may be payable from the litigation will be assessable as ordinary income to The Company
Question 2
Will any proceeds payable to The Company resulting from the litigation be assessable as ordinary income to The Company under section 6-5 of the ITAA 1997?
Answer
Yes
Question 3
Will The Company be entitled to claim deductions under section 8-1 of the ITAA 1997 for legal and associated costs in respect of the litigation?
Answer
No
Relevant legislative provisions
Income Tax Assessment Act 1997
Section 6-5
Section 8-1
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