If you think you received a foreign termination payment (discussed at question 4), the following description will help you decide what to do.
An FTP is a payment that:
- you received in consequence of the termination of your employment in a foreign country and the payment relates only to a period of employment when you were a foreign resident, or
- was not exempt from income tax in the foreign country, you were an Australian resident during the period of the employment or service, and you received the payment as a result of the termination of your
- employment in a foreign country where the foreign earnings were exempt from Australian tax for the period of employment, or
- qualifying service on an approved project and the eligible foreign remuneration was exempt from Australian tax during the period of engagement.
The payment is not an FTP if it is a superannuation benefit paid from a superannuation fund, retirement savings account or an approved deposit fund or if it is a payment of a pension or an annuity.
Foreign termination payments are non-assessable non-exempt income, that is, tax-free income. Do not show them anywhere on your tax return.