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This edited version has been archived due to the length of time since original publication.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: 1012542670702

Subject: Income tax - exempt income

Question:

Is the payment you receive from the Governor-General's indigenous student teacher scholarship assessable income?

Answer:

No.

This ruling applies for the following period:

Year ended 30 June 2013

The scheme commenced on:

1 July 2011

Relevant facts:

You are a recipient of the Governor-General's indigenous student teacher scholarship.

You are a full time student.

You have provided the following document, which forms part of this private binding ruling.

    · Governor-General's indigenous student teacher scholarship - guidelines for the relevant year.

Relevant legislative provisions:

Income Tax Assessment Act 1997 Section 6-5

Income Tax Assessment Act 1997 Section 51-1

Income Tax Assessment Act 1997 Section 51-10

Income Tax Assessment Act 1997 Section 51-35.

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 taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.

Scholarship payments are treated as ordinary income.

However, section 51-10 of the ITAA 1997 provides that, subject to the exceptions and special conditions contained within section 51-35 of the ITAA 1997, income received by way of a scholarship, bursary, educational allowance or education assistance by a full-time student at a school, college or university is exempt from income tax.

In general terms, for a scholarship to be exempt from income tax:

    · the taxpayer must be in receipt of a scholarship and the scholarship must be provided principally for educational purposes;

    · the taxpayer must be a full-time student at a school, college or university; and

    · there must be no condition that the taxpayer be an employee of the scholarship provider or enter into any contract with the scholarship provider that is wholly or principally for labour.

In your case, there are no conditions attached to the scholarship requiring you to be an employee of the scholarship provider.

There are no conditions attached to the scholarship requiring you to enter into a contract with the scholarship provider that is wholly or principally labour.

The scholarship gives no guarantee of further employment with the scholarship provider or related entity.

Accordingly, your scholarship income is exempt from tax under section 51-10 of the ITAA 1997 and does not form part of your assessable income.


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