Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 51 - Exempt amounts  

SECTION 51-57   Interest on judgment debt relating to personal injury  

51-57(1)    

An amount paid by way of interest on a judgment debt, whether payable under an *Australian law, or otherwise, is exempt from income tax if:

(a) the judgment debt arose from a judgment (the original judgment ) given by, or entered in, a court for an award of damages for personal injury; and

(b) the amount is in respect of the whole or any part of the period:

(i) beginning at the time of the original judgment, or, if the judgment debt is taken to have arisen at an earlier time, at that earlier time; and

(ii) ending when the original judgment is finalised.

51-57(2)    
For the purposes of subsection (1), an original judgment is finalised at whichever of the following times is applicable:

(a) if the period for lodging an appeal against either the original judgment or a subsequent related judgment ends without an appeal being lodged - the end of the period;

(b) if an appeal from either the original judgment or a subsequent related judgment is lodged and final judgment on the appeal is given by, or entered in, a court - when the final judgment takes effect;

(c) if an appeal from either the original judgment or a subsequent related judgment is lodged but is settled or discontinued - when the settlement or discontinuance takes effect.

51-57(3)    
For the purposes of paragraph (2)(b), a judgment is a final judgment if:

(a) no appeal lies against the judgment; or

(b) leave to appeal against the judgment has been refused.