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Edited version of private ruling
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Ruling
Subject: Interest income
Question
Are you assessable on interest from a term deposit account which has funds from your Superannuation lump sum?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You placed funds into a term deposit from a superannuation lump sum.
You receive interest on the term deposit account.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(2)
Reasons for decision
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.
Interest income is regarded as ordinary income and therefore assessable under subsection 6-5(2) of the ITAA 1997.
It is not relevant in determining the assessability of the interest, where the original funds were sourced. The special superannuation rules do not apply to funds held in a term deposit.
Therefore, you are assessable on interest derived from the term deposit account.