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Edited version of private advice
Authorisation Number: 1052228434295
Date of advice: 6 March 2024
Ruling
Subject: Assessability of income
Question 1
Does the interest component amount of the compensation payment form part of your assessable income?
Answer 1
No. The interest component amount does not form part of your assessable income. However, as a non-resident taxpayer, you will be liable to withholding tax on Australian-sourced interest income under section 128B of theIncome Tax Assessment Act 1936.
Question 2
Does the refund of service fees amount of the payment form part of your assessable income?
Answer 2
No. As you have never claimed a deduction for the service fees, the refund of the service fees is a reimbursement and does not form part of your assessable income.
This ruling applies for the following period:
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
You relocated from Country A to Country B last year and currently reside there.
Bank A sent you a letter in 20XX.
In this letter they advised that they were reviewing records of financial advice customers who paid ongoing service fees authorised by Company A.
This review was conducted for service fees paid over a number of years.
You had a financial plan with Company B who were part of Company A
As you had changed addresses, you did not receive the letter sent by Bank A.
Later the following year, you were paid an amount into your Bank A account (the payment). This amount included a refund of advice fees plus interest for financial advice you may not have received.
You have provided a statement that shows the breakup of payments for the refund of advice fees and interest.
You filed an income tax return in Country B for the income year in which you received the payment. In that return, you included the interest component from your Bank A payment.
You did not claim any deductions for the advice fees in your Country A income tax returns.
Relevant legislative provisions
Income Tax Assessment 1936 section 128B
Income Tax Assessment Act 1997 section 6-5