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Edited version of your written advice
Authorisation Number: 1051488131907
Date of advice: 06 March 2019
Subject: Surrender of overseas whole of life insurance policy
Question
Are the bonuses received on surrender of your foreign life insurance policy assessable in Australia?
Answer
No. The lump sum payment is not ordinary income or statutory income and as such is not included in your assessable income. You do not need to report the payment anywhere in your income tax return.
This ruling applies for the following period:
Period ending 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You have a whole of Life Assurance Policy.
The Policy is governed by the laws of Country A.
You commenced the policy in 198X when you purchased a house.
You have sold the house.
You immigrated to Australia.
You have continued to pay the monthly premium from commencement of the policy
You have the right to surrender your policy at any time.
You are considering surrendering your policy.
Your surrender amount involves payment of a Basic Policy amount plus Accrued annual increase plus special bonus and a surrender value final increase.
Relevant legislative provisions
Income tax assessment Act 1997 Section 6-5
Income tax assessment Act 1997 Section 6-10
Income tax assessment Act 1997 Section 15-75
Income tax assessment Act 1936 Section 26AH