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Edited version of private advice
Authorisation Number: 1051828977803
Date of advice: 30 April 2021
Ruling
Subject: Assessable income
Question 1
Is the lump sum amount payable under section 61 of the Return to Work Act 2014 (SA) (RWA) assessable as a capital gain?
Answer
No. The lump sum payment is capital in nature. Pursuant to subparagraph 118-37(1)(a)(ii) of the Income Tax Assessment Act 1997 (ITAA 97), any capital gain or capital loss made from the lump sum amount will be disregarded.
Question 2
Is the lump sum amount payable under section 61 of the RWA assessable as ordinary income?
Answer
No. Having considered the circumstances and relevant factors, the lump sum amount is not in respect of, or in relation to, any income producing activity so the lump sum amount is not ordinary income under section 6-5 of the ITAA 97.
This ruling applies for the following periods:
Year ending 30 June YYYY
Year ending 30 June YYYY
The scheme commences on:
DD/MM/YYYY
Relevant facts and circumstances
The deceased passed away on DD/MM/YYYY.
The applicant is the spouse of the deceased.
The applicant is entitled to compensation payable under section 61 of the Return to Work Act 2014 (SA) and clause 45(3) of the Return to Work Act Transitional Provisions.
Relevant legislative provisions
Income Tax Assessment Act 1997 subparagraph 118-37(1)(a)(ii)
Income Tax Assessment Act 1997 section 6-
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