What this ruling covers
The Australian Taxation Office has issued Product Ruling PR 2026/20. The ruling sets out the income tax treatment for Australian residents who invest in a Fund Administration Bond (FAB) or Portfolio Administration Bond (PAB) issued by St. James's Place International plc (SJPI), a company registered in Ireland.
Eligible policy status
The ruling confirms these bonds are eligible policies under section 26AH of the Income Tax Assessment Act 1936. The consequences of that status are:
- Earnings (bonuses) paid out within the first 10 years are assessable income.
- Earnings (bonuses) paid out after 10 years are not assessable income.
Capital gains tax treatment
Capital gains and losses on payouts - including death benefits and surrender proceeds - are disregarded for CGT purposes under the relevant provisions of the Income Tax Assessment Act 1997.
Period the ruling applies
The ruling applies to bonds purchased or assigned between 1 July 2026 and 30 June 2029. The ruling also covers investors who became Australian residents during that window after purchasing from 1 July 2023.
Anti-avoidance rules
The ATO confirms the anti-avoidance rules in Part IVA will not apply, provided the scheme is carried out as described in the ruling.
The 10-year eligible period and annual investment increases
If funds are withdrawn within 10 years of the first investment, earnings (bonuses) are included in assessable income under section 26AH(6) of the Income Tax Assessment Act 1936.
If the annual investment amount increases by more than 25% above the previous year's amount, the 10-year eligible period resets to the year of the increase.
What this ruling does not cover
PR 2026/20 does not address:
- Treatment of fees and charges.
- Foreign currency gains or losses under Division 775.
- The section 160AAB rebate.
- CGT on bond assignments made for consideration.
Where to find the full ruling
The full authorised PDF version of PR 2026/20 is available on the ATO legal database at https://www.ato.gov.au/law/view/document?docid=PRR/PR202620/NAT/ATO/00001.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.