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Edited version of private advice
Authorisation Number: 1052252753901
Date of advice: 21 May 2024
Ruling
Subject: Income - personal windfall gains
Question
Is the prize money you received assessable income under section 6-5 or section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
No.
The value of the prize is not considered ordinary or statutory income and is not assessable income under section 6-5 or section 6-10 of the ITAA 1997.
The cash prize was not remuneration for services, you did not solicit the prize and you did not rely on winning the prize to provide for your regular maintenance.
A prize or a gift will be assessable income where it is income in the ordinary sense of the word or an amount or benefit that is included in assessable income (statutory income).
Generally, a gift or prize is regarded as a personal windfall gain and not ordinary income unless the taxpayer has received the prize or gift because of, or in respect of, an income-producing activity of the taxpayer.
In your case, the prize was not determined by services rendered to the prize giver.
The prize is a one-off award with no expectation of a recurrence.
The amount was in addition to any regular income you may receive, and it is accepted that you did not rely on it for your regular maintenance.
There is no connection between the payment and your employment when the prize was awarded by the prize giver.
The prize is competitive and you had no expectation of winning the prize.
Having considered your circumstances and relevant factors, the sum is a non-assessable windfall gain.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
XX July 20XX
Relevant facts and circumstances
You were invited to be a contestant in a XX XX XX XX in 20XX.
You received the invitation as you were a previous contestant and winner of the 20XX season of the programme.
You received an appearance payment in advance and a fortnightly living expenses allowance.
You won the 20XX competition and was awarded a cash prize.
You also appeared on the programme as a guest judge in 20XX.
You have not otherwise been a regular guest on the programme.
You were employed as a XX XX for this period and continue to be employed as a XX XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 6-10
Income Tax Assessment Act 1997 subsection 15-2(1)
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