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This edited version has been archived due to the length of time since original publication.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: 1012488303004

Ruling

Subject: Income

Question and answer

Is the money you received from your family assessable income?

No.

This ruling applies for the following period:

Year ended 30 June 2013

The scheme commenced on:

1 July 2012

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

Your have received multiple payments from your family who reside overseas.

The payments are voluntary and your parents require nothing in return.

You will not provide any services or income producing activities in return.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 6-5

Reasons for decision

Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.

Ordinary income is income according to ordinary concepts. Ordinary income has generally been held to include three categories, namely, income from rendering personal services, income from property and income from carrying on a business.

Taxation Ruling IT 2674 deals specifically with whether gifts received by church workers are assessable. However, from this ruling some general principles for determining whether gifts are considered to be assessable income can be established. Paragraph 32 of IT 2674 states:

    · a personal gift received for personal reasons without any connection to any income-producing activity on the part of the recipient is not assessable income for income tax purposes

    · a gift or gratuity made only on grounds personal to the recipient is not assessable income

    · if a gift is referable exclusively to the attitude of the donor personally it is not assessable income

    · a voluntary payment received from a family member, a friend or an acquaintance, or a fellow worker is prima facie received on grounds personal to the recipient, or to assist his or her personal needs. If nothing more than this appears from a consideration of the whole circumstances of the case, the payment is not assessable income.

All of the above principles are derived from relevant case law.

In your case, the money will be given to you as a gift. It will be paid for personal reasons without any connection with any income-producing activity on your part. The money that you received will not be earned as it will not directly relate to any services you will perform.

The fact that you received the money in multiple payments is irrelevant. It is the motive of the donor and the character of the payment in the hands of the recipient that are the relevant factors. Therefore, the amounts that you will receive are all voluntary gifts of money to you. Accordingly, the money will not be assessable income under section 6-5 of the ITAA 1997.