Income tax: can a payment in lieu of notice, on termination of employment, be treated as a bona fide redundancy payment?
Please note that the PDF version is the authorised version of this ruling.This document has changed over time. View its history.
Notice of Withdrawal
1. Taxation Determination TD 93/14 sets out the factors that needed to be met for a payment in lieu of notice to be a bona fide redundancy under section 27F of the Income Tax Assessment Act 1936 (ITAA 1936).
2. Section 27F of the ITAA 1936 has been repealed by the Superannuation Legislation Amendment (Simplification) Act 2007 and replaced with the equivalent section 83-175 of the Income Tax Assessment Act 1997 (ITAA 1997) which describes what a genuine redundancy payment is (formerly called a bona fide redundancy payment).
3. Taxation Ruling TR 2009/2 - Income tax: genuine redundancy payments now provides the Commissioner's view on the operation of section 83-175 of the ITAA 1997 on what a genuine redundancy payment is. In particular, paragraphs 10 to 54 and 233 to 312 of TR 2009/2 discuss the requirements that must be met for an employment termination payment, or part of it, to be treated as a genuine redundancy payment. As this Determination is no longer required, it is withdrawn.
Commissioner of Taxation
22 April 2009