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ATO Interpretative Decision

ATO ID 2002/653 (Withdrawn)

Interntational Tax
Assessability of maintenance or alimony payments from the USA

Attention This ATO ID is withdrawn. Guidance on the issue contained in this ATO ID can be found at Amounts not included as income (QC 31936).
Attention This document has changed over time. View its history.
FOI status: may be released
Status of this decision: Decision withdrawn 12 March 2018.

CautionCAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.


Are maintenance or alimony payments sourced in the United States of America (USA) and received by an Australian resident taxpayer assessable under subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997)?


No. Maintenance or alimony payments sourced in the USA and received by an Australian resident taxpayer are not assessable under subsection 6-5(2) of the ITAA 1997.


The taxpayer is an Australian resident for income tax purposes.

The taxpayer is separated from their spouse and divorce proceedings are pending.

The taxpayer's spouse resides and works in the USA.

The taxpayer is receiving USA court awarded maintenance or alimony payments from their estranged spouse.

The taxpayer does not have custody of their children and the maintenance or alimony payments have not been awarded for child support.

Reasons for Decision

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.

Subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income then it is not assessable income.

Section 11-15 of the ITAA 1997 lists those provisions dealing with income which may be exempt. Included in this list is section 51-50 of the ITAA 1997.

Paragraph 51-50(2)(a) of the ITAA 1997 provides that periodic maintenance payments made to a person who is, or was, a spouse of the maintenance payer are exempt from income tax.

In determining liability to tax on foreign sourced income received by an Australian resident taxpayer it is necessary to consider not only the income tax laws but also any applicable double tax agreement contained in the International Tax Agreements Act 1953 (the Agreements Act).

Section 4 of the Agreements Act incorporates that Act with the ITAA 1997 so that those Acts are read as one. Subsection 4(2) of the Agreements Act overrides the ITAA 1997 where there are inconsistent provisions (except for some limited provisions).

Schedule 2 to the Agreements Act contains the double tax agreement between Australia and the USA (the US Convention). The US Convention operates to avoid the double taxation of income received by Australian and USA residents.

Paragraph (6) of Article 18 of the US Convention provides that alimony or other maintenance payments arising in the USA and paid to a resident of Australia shall be taxable only in the USA.

The maintenance or alimony payments received by the taxpayer are therefore not assessable income under subsection 6-5(2) of the ITAA 1997.

Date of decision: 8 May 2002

Year of income:Year ended 30 June 2001

Legislative References:
Income Tax Assessment Act 1997
   subsection 6-5(2)
   subsection 6-15(2)
   section 11-15
   section 51-50
   paragraph 51-50(2)(a)

International Tax Agreements Act 1953
   section 4
   subsection 4(2)
   Schedule 2
   Schedule 2, Article 18(6)

Assessable income
Double tax agreements
Exempt income
Foreign income
Foreign sourced income
Maintenance payments
Overseas countries
United States of America

Business Line: Small Business/Individual Taxpayers

Date of publication: 19 June 2002

ISSN: 1445-2782

ATO ID 2002/653 (Withdrawn) history   Top  
   Date   Version 
    8 May 2002   Original statement   
 You are here ®  12 March 2018   Withdrawn   


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