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Edited version of private advice
Authorisation Number: 1052109744867
Date of advice: 19 April 2023
Ruling
Subject: Assessable income-foreign pension
Question
Is a social security payment received from Country X included in your assessable income in your capacity as trustee for your child under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
No.
Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.
Article X of the Country X Agreement provides that social security payments by Country X to a resident of Australia shall only be taxed in Country X.
Accordingly, the social security payment received is therefore not assessable income under section 6-5 of the ITAA 1997 as you are a resident of Australia.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Your child is X years old.
Your child is an Australian citizen.
The relevant department in Country X advised you that your child is eligible to receive a payment.
Your child will be eligible to receive the payment until they are X years old.
This payment will be approximately $XXX per month.
This payment will be made to a representative payee through an in-trust account in Australia.
The payments will be audited to ensure that the money is only for your child's benefit.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5