Lump sum payments for healthcare practitioners
If you are a healthcare practitioner, you may receive lump-sum payments.
It is important to know how to treat these correctly when received.
As part of the ATO’s work on the Tax Avoidance Taskforce, they see a number of arrangements in the healthcare services industry where a lump sum payment is made and treated as a capital gain instead of ordinary income.
These arrangements typically involve a healthcare centre operator paying a lump sum to you, your private company or your family trust when they commence or continue to provide healthcare services at that centre.
Incorrectly treating these payments as capital gains instead of ordinary income may result in an underpayment of tax and potentially expose you to tax adjustments and penalties.