Question

Facts

VDSE has recently signed up to a Federal Government program whereby they train welfare recipients as apprentices. VDSE is receiving $20,000 a year from the Federal Government per trainee, they currently have five in addition to their other apprentices.

Issue

Whether the $100,000 a year from the Federal Government is assessable as statutory income under Section 15-10 ITAA97

Answer 1

15-10 Your assessable income includes a bounty or subsidy that:

(a) you receive in relation to carrying on a *business; and

(b) is not assessable as *ordinary income under section 6-5.

The beneficiary tax offset is available if you receive certain Australian Government allowances and payments.

You pay no tax for the year if you:

• only receive any of the qualifying benefits and allowances, and
• have no other taxable income.

If you have other assessable income you may still need to pay some tax.

Since VDSE training apprentices for which they received govt grants in addition to other apprecntices, therefore $100,000 will be assessable as statutory income.