Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012057572084

This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.

Ruling

Subject: Assessability of bank error

Question

Are monies incorrectly transferred to you as a result of a bank error assessable in the
2010-11 financial year?

Answer

No

This ruling applies for the following period

Year ended 30 June 2011

The scheme commenced on

13 September 2004

Relevant facts

You deposited funds into a term deposit with a financial institution in 2004.

The deposit has been rolled over each year on the date of deposit, with the latest rollover being in the 2010-11 financial year.

You have provided documentation showing that you submitted a withdrawal notification to the financial institution in late June 2011 advising that you wished to withdraw the funds from this account in early July 2011, thereby closing the term deposit on this date.

The financial institution incorrectly withdrew the funds in late June 2011 and deposited the amount into your account.

In correspondence with the financial institution they advised it was an administrative error and the deposit statement will show that the funds were withdrawn in early July as intended.

The financial institution paid you interest for a period calculated from the deposit rollover date in the 2010-11 financial year to the date you intended for the repayment to be made in early July 2011.

You have received confirmation that the financial institution did not report any repayment amount in respect of your term deposit for the year ended 30 June 2011.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 393-10(1)

Reasons for decision

Monies that would normally constitute income upon receipt were transferred into your account as a result of a bank error. The bank had no authority to make such a transfer, a fact it subsequently acknowledged before effectively remedying the error.

The amount incorrectly transferred and subsequently remedied will not be assessable for the 2010-11 financial year.