COMMISSIONER OF TAXATION
The Commissioner of Taxation, Chris Jordan, gives notice of the following Rulings, copies of which can be obtained from http://ato.gov.au/law.
NOTICE OF RULING |
Ruling Number | Subject | Brief Description |
TD 2017/11 | Income tax: who should be assessed to interest on bank accounts? | The Determination sets out the Commissioner’s position on who should be assessed to interest on bank accounts? The Determination only applies to income years commencing both before and after its date of issue. |
NOTICE OF WITHDRAWALS |
Ruling Number | Subject | Brief Description |
TD 92/106 | Income tax: who should be assessed to interest earned on a joint bank account? | Taxation Determination TD 92/106 is withdrawn with effect from 26 April 2017. |
TD 92/182 | Income tax: a taxpayer appoints another person as a joint signatory to operate a bank account in the taxpayer’s name, if she becomes ill or is absent from Australia for any length of time. The taxpayer retains sole beneficial entitlement to the money in the bank account. Is the appointee assessable on any of the interest income derived? | Taxation Determination TD 92/182 is withdrawn with effect from 26 April 2017. |
TD 93/148 | Income tax: are monetary gifts received by a child or any interest earned on investing such money treated as ‘excepted assessable income’? | Taxation Determination TD 93/148 is withdrawn with effect from 26 April 2017. |
TD 94/66 | Income tax: if the trustee of a unit trust is ‘the owner’ of a ‘unit of industrial property’ (UIP) under Division 10B of Part III of the Income Tax Assessment Act 1936, is a unit holder in that trust entitled to a deduction under Division 10B in respect of that UIP? | Taxation Determination TD 94/66 is withdrawn with effect from 26 April 2017. |
TD 98/26 | Income tax: what is the approved form and manner of lodgment for an election to roll‑over an eligible termination payment? | Taxation Determination TD 98/26 is withdrawn with effect from 26 April 2017. |
TD 2002/21 | Income tax: how do the transitional measures in the Corporations Act 2001 (‘Corporations Act’) impact upon the definition of a financial entity for the purposes of Division 820 of the Income Tax Assessment Act 1997 (‘ITAA 1997’)? | Taxation Determination TD 2002/21 is withdrawn with effect from 26 April 2017. |
Overview
The Commissioner of Taxation, Chris Jordan, has issued Notice of Rulings, including TD 2017/11, which provides guidance on who should be assessed to interest on bank accounts. This ruling aims to clarify the taxation obligations relating to interest earned on bank accounts and applies to income years commencing both before and after its date of issue. Simultaneously, several other Taxation Determinations, including TD 92/106, TD 92/182, TD 93/148, TD 94/66, TD 98/26, and TD 2002/21, have been withdrawn as of 26 April 2017, reflecting updated or superseded guidance. These rulings were issued under the authority of the Commissioner of Taxation and are intended to assist taxpayers in understanding their obligations under the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997. The policy objective of these rulings is to ensure clarity and consistency in the application of tax laws to specific scenarios, thereby promoting compliance and reducing disputes between taxpayers and the Commissioner.
Scope and Application
The Commissioner of Taxation has issued a ruling that applies to individuals and entities, addressing the assessment of interest on bank accounts. This ruling outlines who should be assessed for income tax on interest earned from bank accounts and is effective for income years commencing both before and after its date of issue. The ruling does not specify exclusions, exemptions, or thresholds within its scope. The Commissioner has also withdrawn several prior Taxation Determinations related to similar matters, effective from 26 April 2017, indicating an update or clarification in the interpretation and application of the relevant provisions. The rulings and determinations apply nationally across Australia, governed by the Commonwealth, and their application may be further detailed or modified by subordinate instruments.
Key Provisions
The main operative sections of this notice concern the Commissioner of Taxation’s rulings and the withdrawal of previous determinations. The ruling TD 2017/11 (paragraph 1) provides the Commissioner’s position on who should be assessed to interest on bank accounts, applying to income years both before and after the date of issue. This ruling essentially clarifies the tax position regarding interest earned on bank accounts, which is relevant for taxpayers who may have multiple parties with access to a bank account or where interest is earned on joint accounts. The withdrawn determinations (paragraph 3) include TD 92/106, TD 92/182, TD 93/148, TD 94/66, TD 98/26, and TD 2002/21, each of which was in effect until 26 April 2017. These determinations covered a range of topics, such as the assessment of interest earned on joint accounts, the tax treatment of monetary gifts to children, and the form of lodgment for elections to roll over eligible termination payments, among others.
The obligations and requirements imposed by these rulings and determinations fall primarily on taxpayers, financial institutions, and trustees who need to ensure compliance with the current tax laws. For instance, taxpayers must correctly identify who is liable for interest income earned on bank accounts, particularly in cases involving joint accounts or where another person has been appointed as a joint signatory. Financial institutions and trustees must also ensure that interest income is reported accurately and assessable income is correctly attributed to the appropriate party. These obligations are crucial to maintaining the integrity of the tax system and ensuring that all assessable income is properly accounted for and taxed.
There are no explicit offences, penalties, or consequences for breach mentioned in the text. However, failure to comply with the tax obligations outlined in the rulings and determinations could potentially lead to civil or criminal penalties under the broader tax laws. The specific penalties would depend on the nature and extent of the non-compliance, and could include fines, interest on unpaid taxes, and in severe cases, criminal charges. It is important for taxpayers and other affected parties to adhere to the provisions set out in the Commissioner’s rulings to avoid any adverse consequences.