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Edited version of your written advice
Authorisation Number: 1012761333057
Ruling
Subject: Lump sum payment
Question and Answer
Is the lump sum you received in exchange for previously deferring the payment of your pension assessable?
Yes.
This ruling applies for the following period
Year ended 30 June 2014
The scheme commences on
1 July 2013
Relevant facts and circumstances
You are a resident of Australia for taxation purposes.
You became a citizen of Australia.
You deferred the receipt of a pension from a foreign country.
You received a lump sum payment because you previously deferred receipt of your pension.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 6-5
Reasons for decision
Section 6-5 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, whether in or out of Australia, during the income year.
Pensions, including foreign pensions or amounts paid for the deferral of a pension, are examples of ordinary income that would be generally be included in a resident Australian taxpayer's assessable income.
The lump sum payment you received from a foreign country for the income year ended 30 June 2014 is ordinary income and so is assessable under section 6-5 of the ITAA 1997.