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Edited version of private ruling
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Ruling
Subject: compensation payment
Question:
Is the lump sum payment you receive under section 45A of the Workers Rehabilitation and Compensation Act 1986 (SA) (the WRCA) included in your assessable income?
Answer: No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
The scheme that is the subject of the ruling:
You received a lump sum payment under section 45A of the WRCA.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(2).
Income Tax Assessment Act 1997 section 118-37(1)(b)
Explanation: (This form does not form part of the ruling)
Class ruling CR 2010/8 Income tax: assessability of lump sum compensation receipts and interest paid under section 45A of the Workers Rehabilitation and Compensation Act 1986 (South Australia), discusses the Commissioner's view on the taxation consequences of lump sum payments made under section 45A of the WRCA.
CR 2010/8 says that a lump sum compensation amount received under section 45A of the WRCA is not ordinary income under section 6-5 of the ITAA 1997.
Furthermore, any capital gain or loss made from the receipt of the lump sum compensation payment under section 45A is disregarded under paragraph 118-37(1)(b) of the ITAA 1997.
Accordingly, none of the lump sum payment you receive under section 45A of the WRCA will be included in your assessable income.