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Edited version of private advice
Authorisation Number: 5010068595664
Date of advice: 27 April 2022
Ruling
Subject: Payment received
Question
Are you liable for tax on the compensation payment?
Answer
No. The amount received as compensation, is not regarded as ordinary assessable income. This amount is capital in nature and subject to the capital gains tax provisions. In your case any capital gain made will be disregarded under section 118-305 of the Income Tax Assessment Act 1997.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You received an offer from your superannuation fund to pay compensation for potential inappropriate advice received in relation to your superannuation product.
You received an amount of compensation.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 102-5
Income Tax Assessment Act 1997 section 118-305