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Edited version of private ruling
Authorisation Number: 1011707531576
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Ruling
Subject: Foreign Pension
Question:
Is the specific pension you are receiving assessable income in Australia?
Answer:
Yes.
This ruling applies for the following period/s:
Year ended 30 June 2010.
The scheme commenced in:
1 July 2009.
Relevant facts and circumstances
Some time in the 2009-10 income year, you became a resident of Australia for income tax purposes.
You are a retired former employer of a specific organisation.
You are receiving a specific pension from this organisation.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5
Income Tax Assessment Act 1997 Subsection 6-5(2)
Reasons for decision
Section 6-5 and section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary and statutory income they derived directly or indirectly from all sources, whether in or out of Australia during the income year.
Pensions and annuities are ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.
Salaries and emoluments received from an International Organisation by a 'person who holds an office' in that organisation may be exempt from Australian income tax under regulations made under the International Organisations (Privileges and Immunities) Act 1963 (IO(P+I)A).
It is considered that the phrase 'person who holds an office' in relation to a prescribed International Organisation covers those people who work as employees for that organisation. A pension received from a prescribed International Organisation, such as the specific organisation you worked with, is not exempt from tax in Australia as the IO(P+I)A does not extend tax exemptions to former officers of an International Organisation.
The assessability of pensions paid by an International Organisation to a former officer of the specific organisation you worked for, came before a Taxation Board of Review where a pension recipient sought exemption from tax under former paragraph 23(y) of the Income Tax Assessment Act 1936 (ITAA 1936). The Board dismissed the taxpayer's claim that the pension was an emolument of an official of a prescribed organisation, holding that the term emolument related to a monetary benefit paid to a serving officer, rather than as including pension payments to a former official. Consequently, the pension received as a result of former employment with the specific organisation was not exempt under former paragraph 23(y): See Case M90 80 ATC 648; 24 CTBR (NS) Case 65. See also Taxation Ruling TR 92/14 and Taxation Determination TD 92/153.
Therefore, in your case the pension you are receiving from a specific organisation is assessable income in Australia.