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Edited version of your written advice
Authorisation Number: 1012988217609
Date of advice: 4 April 2016
Ruling
Subject: Determination of the deductible amount of undeducted purchase prices
Question
Are you entitled to a deductible amount in respect of your foreign pensions?
Answer
Yes
Reasons for Decision
The part of your annual pension or annuity income which represents a return to you of your personal contributions is free from tax. The tax-free portion is called the deductible amount.
It is calculated by dividing the UPP of your pension by either the term of the pension (if fixed), or a life expectancy factor - that applies to you or your spouse if they have a greater life expectancy - according to life expectancy statistics.
The Australian life tables are published by the Australian Government Actuary, and the life expectancy is taken from when the pension first became payable.
The annual deductible amount is calculated using the following formula:
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A = relevant share of the pension payable to you (if all the pension is payable to you then A = 1)
B = is the amount of the UPP of the Aviva Pension
C = is the residual capital value (if any)
D = is the relevant number
Relevant facts and circumstances
This ruling is based on the facts stated below. Any material variation from these facts (including any matters not stated in the description above and any departure from these facts) will mean that the ruling will have no effect. Where there is no variation, the ruling can apply for more than just the period/s mentioned above.
You are resident of Australia for income tax purposes
Your pensions are paid by various pensions
You have provided letters and statements from your pensions to assist the Commissioner in determining the amount of your personal contributions
You currently receive 100% of your pensions
The residual capital value of the pension is nil.
Your pension is paid on a monthly basis.
Assumptions
No assumptions have been used in this ruling as it is given on the basis of the facts and circumstances stated above.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 27H
Income Tax Assessment Act 1936 Subsection 27H(2)
Income Tax Assessment Act 1936 Subsection 27H(3)
Income Tax Assessment Act 1936 Subsection 27H(4)
Other references:
Taxation Determination TD 2006/17
Taxation Determination TD 2006/54
Taxation Determination TD 2006/72