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Edited version of private advice
Authorisation Number: 1052080984789
Date of advice: 31 January 2023
Ruling
Subject: Assessable income - compensation
Question
Is the lump sum compensation payment you received assessable income?
Answer
No.
You received a single lump sum payment to compensate for abuse you suffered as a child. The payment has none of the indicia of income including periodicity, recurrence, or regularity. Therefore, the payment is not included in your assessable income.
Further, the payment is exempt from capital gains tax (CGT) as it was paid to compensate for personal harm you suffered.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You applied for compensation for abuse you suffered as a child.
You were advised by letter that your application was successful.
You received a lump sum payment.
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 118-137