Issue
Is the amount won from a sweepstake conducted by a bank included in the taxpayer's assessable income under section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
Yes. The amount won from a sweepstake held by a bank is included in the taxpayer's assessable income under section 6-10 of the ITAA 1997 as it is statutory income under section 26AJ of Income Tax Assessment Act 1936 (ITAA 1936).
Facts
The taxpayer opened a bank account.
As a bank account holder, the taxpayer was able to complete a customer survey form. The customer survey form was entered into a sweepstake competition conducted by the bank.
The taxpayer's customer survey form was randomly selected as a prize winner in the sweepstake.
Reasons for Decision
Section 6-10 of the ITAA 1997 provides that a taxpayer's assessable income includes statutory income amounts that are not ordinary income but are included in assessable income by another provision.
Section 10-5 of the ITAA 1997 lists provisions about assessable income. Included in the list is section 26AJ of the ITAA 1936 which deals with investment-related lottery winnings, including cash prizes. The effect of subsection 26AJ(1) of the ITAA 1936 is that where an amount is paid to a taxpayer and: • the payment is by way of winnings from betting, lottery or another form of gambling or game with prizes, • the chance to participate in, for example the lottery, was provided wholly or partly in respect of an investment held by the taxpayer in or with an investment body, and • the lottery or game was organised by the investment body
then the amount received by the taxpayer is included in their assessable income.
The taxpayer received the amount as winnings from a sweepstake which was organised by the bank. The chance to participate in the sweepstake was provided wholly in respect of an investment the taxpayer held with the bank. The amount received by the taxpayer meets the requirements of subsection 26AJ(1) of the ITAA 1936. This amount is therefore statutory income and is included in the taxpayer's assessable income under section 6-10 of the ITAA 1997.