How to record the lump sum payments to healthcare professionals?

As we all know very well, doctors are an integral part of our lives and we owe them a lot. However, in the eyes of the law, they are ordinary taxpayers, earning high income, usually.

ATO has recently issued a warning again for the tax agents in regards to the treatment of the lump sum payments that the doctors receive from the medical centres.

It was specifically mentioned that some medical centres pay a kind of incentive to attract doctors and to help them start their practice within that particular medical centre.

Unfortunately, these payments are regarded as goodwill price by some of the accountants and the Capital Gains rules applied, which give the taxpayers discounts that is normally not available otherwise.

In following link, ATO makes it very clear that these payments are ordinary income but not capital gain. So they are subject to normal tax rules, without any discount, etc.

Very interesting issue indeed, which affects the health care industry directly.

Click the link below to read more.