Income

The tips received from customers during your work shares a nexus (connection) directly with your employment. Even if the tip received is cash, it is a part of your income and thus must be included in your tax returns.

For more information visit: https://www.ato.gov.au/Individuals/jobs-and-employment-types/Working-as-an-employee/Receiving-cash-for-work-you-do/

Lottery winnings are recognized as Windfall gains, and have element of luck induced with it and thus are not part of your taxable income, however if you choose to invest the winnings from that lottery on assets and you realize capital gains, then you will have to pay tax on those gains. 

In the case where you win a lottery or a prize draw from a bank, building society, credit union or an investment body, you must declare the winnings or benefits that you have received.

To find out more visit: https://www.ato.gov.au/Individuals/Income-and-deductions/Income-you-must-declare/Other-income/

If the beneficiary of the trust is presently entitled to the income of the trust and are not under a legal disability, then it is the beneficiary’s duty to declare their amount of entitlement to the trust’s income in their own tax return. However, if the beneficiary despite having entitled to the trust income, but has a legal disability, then the trustee is assessed on behalf of that beneficiary. When there is no beneficiary presently entitled, the trustee is assessed on net income of the trust estate. If the income is not distributed by the trustee and is retained by the trust, then the trustee is taxed at the highest marginal tax rate plus the Medicare levy.

To find out more visit: https://www.ato.gov.au/Individuals/Income-and-deductions/Income-you-must-declare/Business,-partnership-and-trust-income/

A taxpayer may have received some amounts that they don’t need to include as income in their tax return, however it may still be used as calculations that need to be included elsewhere in your tax return.

There are three categories of amounts received that the taxpayer doesn’t need to include under income:

• Exempt income
• Non-assessable, non-exempt income
• Other non taxable amounts

To find out more about these in detail visit: https://www.ato.gov.au/individuals/income-and-deductions/income-you-must-declare/amounts-you-do-not-include-as-income/

If you are considered an Australian resident for tax purpose, you will still be required to lodge an Australian tax return and declare all your foreign income, even if you have some portion that is exempt. If you have paid tax in an overseas country, you may be eligible to claim a foreign tax offset though you may still be required to pay tax in Australia on the income that you earned overseas. Suppose that for your income level, you are taxed in Australia at 30% but only were only taxed at 23% in the UK for that income bracket whilst you worked there, then you will need to pay that additional 7% in the Australian tax return. If you earn more than the Medicare levy income threshold, you will be required to pay tax on that too.

For more information visit: https://www.ato.gov.au/Individuals/coming-to-australia-or-going-overseas/

If you receive an asset, that is non-taxable unless you dispose of it later on. The income treatment derived from that asset is a little more complex. If You want to find out more on deceased estate tax implications visit: https://www.ato.gov.au/individuals/deceased-estates/if-you-are-a-beneficiary-of-a-deceased-estate/#Receivingassets.

An Australian resident will be taxed on income from all sources. If you’re not an Australian resident for tax purposes, you are only taxed on your Australian-sourced income. You generally don’t need to declare income you receive from outside Australia in your Australian tax return. Some general factors that would be regarded as a real source of income are:

• Location of which the trading activities took place
• Location of the sale of property other than a trading stock
• Where the services took place
• Place where the contract on interest received was created
• The place where the company derived its profits from and where the dividends were distributed
• Location of the intellectual property from which the royalty flows

To find out more access this link: https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Income/Foreign-income-of-Australian-residents-working-overseas/