EXEMPT INCOME AND NON-TAXABLE RECEIPTS

PROFESSIONAL DEVELOPMENT COURSE

Identifying income that is exempt, non-assessable or concessionally treated.

Professional reference and assessment | 2026–27

Scope and reliance

This material provides general reference information. It does not constitute taxation, legal, superannuation or financial advice. The classification of an amount as exempt income, non-assessable non-exempt income or an amount outside the income tax base depends on the governing provision and the relevant facts.

Course overview

The material develops a structured method for identifying exempt income, non-assessable non-exempt income and amounts that are outside assessable income. It addresses government and veterans’ payments, personal receipts, hobbies, windfalls, foreign employment income, mutual dealings, gifts and superannuation lump sum thresholds for 2026–27.

The content is organised into four lessons that move from statutory classification and government payments to NANE income, excluded receipts, personal activities, overseas earnings, mutuality and superannuation. Tables, scenarios, flowcharts, evidence prompts and the final assessment support practical application by tax and accounting professionals.

Course objectives

Explain the distinction between exempt income, non-assessable non-exempt income and amounts outside assessable income.
Classify common veterans’ entitlements, Services Australia payments and other statutory payments using their legal character.
Apply the hobby, gambling, gift, mutuality and foreign employment principles to common professional scenarios.
Identify the practical consequences of classification for deductions, tax losses, reporting and income tests.
Apply the 2026–27 superannuation lump sum thresholds and use a structured evidence-based review process.

Learning outcomes

You should be able to follow the correct sequence for classifying a receipt under Australian income tax law.
You should be able to distinguish taxable, exempt, NANE and non-income components of government and compensation payments.
You should be able to assess whether a hobby, windfall, gift or mutual receipt remains outside assessable income.
You should be able to identify when foreign employment income may be exempt and explain the associated disclosure consequences.
You should be able to document a professional classification conclusion using the supplied tables, evidence prompts and decision tools.

Professional use

A payment description is not conclusive. The governing provision, the identity and circumstances of the recipient, the purpose and character of the payment, and the supporting documents should be examined before the amount is excluded from assessable income.

CPD/CPE compliance mapping

The mapping indicates how the learning outcomes align with broad technical and professional development expectations. It does not determine whether a particular activity satisfies an individual member’s annual requirements.

Lesson outcomes and CPD/CPE alignment
Lesson	CPA Australia	CA ANZ	IPA	Tax Practitioners Board
Classifying exempt and non-taxable amounts	Australian taxation technical knowledge and classification judgement.	Tax technical competence and application of legislation.	Taxation knowledge and professional competence.	Tax law knowledge relevant to competent tax agent services.
NANE income and excluded receipts	Technical analysis of NANE, deductions, losses and reporting consequences.	Application of statutory categories and professional judgement.	Applied income tax knowledge and accurate reporting.	Correct treatment of non-assessable amounts and related obligations.
Hobbies, windfalls and gifts	Income characterisation, evidence and business boundary analysis.	Evidence-based analysis of personal and commercial receipts.	Professional competence in individual and business taxation.	Competent application of ordinary income and record-keeping principles.
Overseas, mutual and superannuation issues	Foreign income, mutuality and superannuation technical knowledge.	Application of specialised exemptions, caps and reporting rules.	Advanced taxation knowledge for diverse client circumstances.	Maintaining current tax law knowledge for accurate advice and services.