The Commissioner of Taxation has forwarded the following memorandum for advice:

Section 10(1) of the Income Tax Assessment Act reads as under:

Subject to the provisions of this Act, income tax shall be levied and paid in and for each financial year upon the taxable income derived directly or indirectly by every taxpayer from sources within Australia during the period of twelve months ending on the thirtieth day of June preceding the financial year in and for which the tax is payable.

A taxpayer who is in receipt of certain annuities, aggregating £215 from the Mutual Life Assurance Company of New York claims that the income represented by these annuities is not derived in Australia. The annuities are payable in Sydney. One annuity was purchased in London and the policy transferred to Sydney; the other was purchased in Sydney.

Though a policy may be taken out in Australia I believe it is the practice for the local representative of the Company to give 'cover' pending endorsement by American principals from whom the policy issues.

I forward copy of the policy issued and should be glad to be favoured with your advice as to whether the annuities are taxable under the section I have quoted.

These annuities arise from the policies of insurance entered into with the New York company. The amounts of the annuities are, in accordance with the policy, paid at the office of the company in Sydney.

In my opinion, these annuities are, so far as regards the annuitant, derived from a source in Australia within the meaning of the Income Tax Assessment Act 1915.

[Vol. 15, p. 78]

1. This opinion is unsigned in the Opinion Book, but it is attributed to Sir Robert Garran.