| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1013139777660
Date of advice: 16 December 2016
Ruling
Subject: Assessable income
Question 1
Are the payments you receive for repayment of a family arrangement assessable?
Answer
No.
This ruling applies for the following periods:
Year ending 30 June 201X
Year ending 30 June 201X
Year ending 30 June 201X
Year ending 30 June 201X
Year ending 30 June 201X
Year ending 30 June 201X
Year ending 30 June 201X
The scheme commences on:
1 July 20X0
Relevant facts and circumstances
In 20X0 you loaned your child an amount of money which was used to assist with the purchase of a property.
The mortgage and title deed is in the name of your child.
This property is now being used as an investment property, deriving rental income.
You have a family arrangement with your child to receive repayments for the amount you loaned to assist with the property purchase.
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 an Australian resident includes all ordinary income derived directly or indirectly from all sources.
Rental income is regarded as ordinary income and forms part of a taxpayer's assessable income. It is the owner of the property that receives rental income that is assessable on the rental income.
In this case, you do not have any ownership interest in the property that derives rental income. The amounts you receive are for repayment of a family arrangement and are not rental income. You are not assessable on the payments you receive for repayment of a family arrangement.