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Edited version of your written advice
Authorisation Number: 1012882107046
Date of advice: 23 September 2015
Ruling
Subject: Assessable income
Question
Are the amounts you received assessable income?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You are a qualified professional.
You were made redundant.
You met and became friends with a business person.
During the year you received a few amounts from the person because they wanted to assist you due to your financial situation.
You helped the person with some personal errands.
There were no expectations that you would provide assistance. If you were busy or could not help they would call another friend for assistance.
The time spent providing assistance would vary from every day, to once or twice a week, to not at all for a month.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 6-10
Reasons for decision
Generally, a gift is regarded as a personal windfall gain or as the result of a domestic or personal arrangement and not as ordinary income unless you have received the money because of, in respect of, or in relation to any income-producing activity of yours.
Taxation Ruling TR 2005/13 provides principles relevant to the determination of whether the receipt of money constitutes a gift. This ruling highlights that rather than attempting to define a 'gift', the courts have described a gift as having the following characteristics and features:
• there is a transfer of the beneficial interest in property ,
• the transfer is made voluntarily,
• the transfer arises by way of benefaction, and
• no material benefit or advantage is received by the giver by way of return.
In your case, you received gifts of money to help you financially due to your personal circumstances. The payments were made to you voluntarily and not as a result of any services that you performed.
Accordingly the payments of cash that you received are considered to be a personal windfall gain and therefore it is not required to be included in your assessable income.