Edited version of private advice

Authorisation Number: 1051852820573

Date of advice: 18 June 2021

Ruling

Subject: Income tax - assessability of an award

Question

Is the prize money awarded to you assessable income?

Answer

No.

Having considered your facts and circumstances the prize awarded to you is not ordinary or statutory income and therefore is not assessable income under either section 6-5 or 6-10 of the Income Tax Assessment Act 1997. In particular:

•         the prize is not a common incident of your occupation

•         it was made voluntarily by the prize giver

•         the prize was not solicited by you

•         it cannot be traced to services rendered to the prize giver

•         the motive of the prize giver was altruistic; and

•         you do not rely on the prize money for general living expenses.

The sum awarded to you is a non-assessable windfall gain. Further information can be found in ATO ID 2002/644.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are an academic.

You received an award in 20XX in recognition for your contributions in your field.

The prize was awarded by foreign not-for-profit organisations and was made voluntarily to you.

You did not actively seek this award. Prior to being nominated you were unaware this award existed.

You were nominated by a fellow academic.

Under the terms of the award, each awardee agrees to utilise the awarded funds in a manner consistent with the reason for the award. Upon being nominated you advised the prize givers how you would utilise the funds to promote further global understanding of your field.

You have not offered your services to the prize givers.

You do not rely on the prize money for general living expenses.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 6-10