O & S income summary pt.1

Question 1

Assessable income comprises & excludes:

Answer 1

Ordinary income - ITAA97 s6-5
statutory income - ITAA97 s6-10

excludes:
non assessable non exempt income - ITAA97 s6-15
exempt income - ITAA97 s6-20

Question 2

Ordinary income under six headings

Answer 2

Income when the receipt is regular, reliable and expected.
Income from personal services and employment.
Income from business.
Income from isolated profit-making undertakings or schemes.
Income from property: rent, interest, annuities and royalties.
Income from compensation: plus exempt income.

Question 3

Income that’s periodic, regular and expected (case)

Answer 3

A salary substitute:

FCT v. Dixon

Question 4

5 types of Income from personal services and employment ( & cases)

Answer 4

4.1 Payments as a reward for services rendered:

Moorhouse v. Dooland (1955) Principles, Chapter 6, Paragraph 6.20.
Brent v. FCT (1971)

4.2 Payments that are personal gifts:

Scott v. FCT (1966)
Hayes v. FCT (1956)

4.3 Prizes and chance winnings:
Kelly v. FCT (1985)

4. 4 Non-cash benefits:
   - Benefits from a loyalty program received by an employee: Payne v. FCT (1996)
   - Benefits provide by an employer to an employee will be discussed in Week 3.

4.5 Payments for entering into restrictive covenants:
FCT v. Woite (1982)

Question 5

Income from personal services—statutory income

Answer 5

Allowances for services rendered - ITAA97 s. 15–2:
Smith v. FCT (1987)

Reimbursement of car expenses - ITAA 97 s. 15–70:

Question 6

Exempt income & classification and who

Answer 6

Definition ITAA97 s. 6–20.

Classification of exempt income:

Entities for whom all income received is exempt no matter what type of income they derive.

List of these entities is in ITAA97 s. 11–5 and includes public universities: scientific institution, religious institution, charitable institution

Income which is exempt regardless of who derives it, such as income from a scholarship.