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Edited version of private ruling
Authorisation Number: 1011712451525
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Ruling
Subject: characterisation of unused leave entitlement from your overseas employer
Question
Is the income you received from the payout of salary and unused leave entitlement from your overseas employer assessable in Australia?
Answer
No.
This ruling applies for the following period
1 July 2008 to 30 June 2009
Relevant facts and circumstances
You finished working with your xx employer.
You moved to Australia after gaining a 136 permanent residency visa.
You had salary and unused leave entitlements which your xx employer paid you in three instalments.
Your income tax return for the financial year showed you were a resident of Australia for part of the financial year.
You declared these instalments in your income tax return for the financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 83-235
Reason for Decision
Section 83-235 of the Income Tax Assessment Act 1997 states:
A payment received by you is not assessable income and is not exempt income if:
(a) it was received in consequence of the termination of your employment in a foreign country; and
(b) it is not a superannuation benefit; and
(c) it is not a payment of a pension or an annuity (whether or not the payment is a superannuation benefit); and
(d) it relates only to a period of employment when you were not an Australian resident. (emphasis added)
Therefore, because you have shown in your income tax return that you were an Australian resident after your period of employment, you do not need to include salary and unused leave entitlements, from your xx employer in your income tax return for the financial year.