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Edited version of your written advice
Authorisation Number: 1051373896926
Date of advice: 18 May 2018
Subject: Income tax - assessable income - interest income - interest income from joint bank account
Question
Are you assessable on the interest income from accounts where you are listed as a joint account holder?
Answer
No
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) specifies that residents of Australia are assessable on income derived from all sources in and out of Australia. Interest income is considered ordinary income and therefore is assessable under section 6-5 of the ITAA 1997. In your case, all the funds in the account belong solely to your relative and you have no entitlement to personally receive any money from this account. You are only a joint holder in order to have access to the account in the event of your relatives death or if they become housebound. In these circumstances, you have no beneficial entitlement to the money held in the accounts and therefore you are not liable to taxation on the interest income in respect to these accounts.
This ruling applies for the following periods:
Year ending 30 June 20xx
Year ending 30 June 20xx
Year ending 30 June 20xx
Year ending 30 June 20xx
Year ending 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
You have requested a renewal of your previous private ruling.
A relative continues to hold xx% ownership of funds in investment/bank accounts.
The relative is the only contributor to the accounts and the sole beneficiary of any interest/dividend received from the accounts.
The situation described in the previous ruling application dated xx January 20xx remains unchanged. The previous ruling considered:
● You and a relative opened joint bank accounts.
● The relative closed previous bank accounts and transferred the funds to new joint accounts.
● You have not contributed any money to these accounts.
● The new accounts were opened to avoid the burden and cost of probate in the event of the relative’s death. Other than this, you will only access the account on the relatives instructions if they becomes housebound.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
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