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Edited version of private advice
Authorisation Number: 1051565158480
Date of advice: 13 August 2019
Ruling
Subject: Interest payments
Question
Is all of the income from the term deposit accounts which you and your children hold in joint names solely assessable to you?
Answer
Yes.
You contributed money to the accounts, the money was held for your welfare and care, and only you receive any interest income which is derived. Consequently you are the beneficial owner of the interest income derived from the accounts and the income is solely assessable to you. Further information on who should be assessed to interest on bank accounts can be found in Taxation Determination TD 2017/11.
This ruling applies for the following periods:
Year ended 30 June 2020
Year ended 30 June 2021
Year ended 30 June 2022
Year ended 30 June 2023
Year ended 30 June 2024
Year ended 30 June 2025
The scheme commences on:
1 July 2019
Relevant facts and circumstances
You are an aged person, and set up bank accounts to deal with proceeds from a number of term deposits which you inherited.
You paid legal costs to have the inherited funds transferred to your name.
You have set up three term deposits in the joint names of yourself and each of your three children.
This is so that should you pass away, each of the children will then have access to the joint account funds without expensive transfer fees.
You placed a number of conditions on these term deposit accounts.
Your children's names are on the account solely to enable them to access funds from the accounts once you pass away.
You are a self-funded retiree and rely solely on the income from the accounts.
All the money held in the accounts and interest earned are solely for the use of you while alive.
You setup and operate the accounts by yourself.
Your children have not received any money from the account, and interest earned is all credited to your savings account.
You use the interest earned to maintain your present lifestyle, and you are mindful that you may need aged care in the future.
Your children have not contributed to the accounts.
Your children have had no benefit from interest accrued in any of the accounts held in both names.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5