Atkinson v Federal Commissioner of Taxation [1951] HCA 64

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298 HIGH COURT (1951.

[HIGH COURT OF AUSTRALIA.] ATKINSON : Q 3 ' e ' F APPELLANT ; AND FEDERAL COMMISSIONER OF TAXATION . ResponpvENv.

H. C. or A, Income Tax (Cth.)—Assessable income—Annuity—Quarterly payments under heri-

195 tage policy—Income Tax Assessment Act 1936-1946 (No. 27 of 1936—No. 6 SZ of 1946), s. 26 (c). PERTH,

By a policy of assurance an assurance company covenanted to pay to the ie executors, administrators or assigns of the assured—(1) In the event of the Mernoursr, death of the assured within twenty years, £4,120 diminished by the sum of £39 for every completed period of three months that he survived 18th Decem- = ber, 1933, payable as follows: (a) £100 on death ; (b) £39 in addition on death ixon,

To and a similar payment at the expiration of each period of three months com- Fullagar JJ.

Sept. 4.

Nov. 5.

mencing subsequent to death and completed on or before the last day of the twenty years; (c) £900 on the last day of the twenty years calculated from 18th December, 1933. (2) In the event of the death of the assured after the expir- ation of the twenty years, £1,000 payable on death. The assured died before the expiration of twenty years, and the company duly made to his widow, who was his executrix and sole beneficiary, the payment of £100 on his death and quarterly payments of £39 each.

Held that on its true construction the purpose of the policy was to provide "an income" during the period between the death of the insured and the expiration of twenty years from the date of the insurance, and that accordingly the quarterly payments of £39 were properly included in the assessable income of the widow under s. 26 (c) of the Income Tax Assessment Act 1936- 1946 as an annuity.