ATO Interpretative Decision
ATO ID 2002/724 (Withdrawn)
Superannuation
Termination payments tax: Calculation of termination payments surcharge liabilityFOI status: may be released
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This ATO ID is withdrawn as it is a straight application of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Where the taxpayer receives a termination payment after the day on which the employment actually terminated, is the date that the payment is made the relevant date for the purposes of calculating the taxpayer's termination payments surcharge liability under subsection 9(2) of the Termination Payments Tax (Assessment and Collection) Act 1997 (TPT Act)?
Decision
No. The relevant date for the purposes of calculating the taxpayer's termination payments surcharge liability under subsection 9(2) of the TPT Act is the date when the employment is terminated.
Facts
The taxpayer receives an employer eligible termination payment (ETP) in respect of the previous employment. The taxpayer then receives a termination payments surcharge assessment for the relevant income year for the amount of surcharge payable in respect of the employer ETP taken in cash. The assessed amount is calculated using a date corresponding with the date of payment of the ETP.
The ETP related information demonstrates that the employment ceased on a date prior to the date of payment of the ETP.
Reasons for Decision
Subsection 9(2) of the TPT Act provides a formula for working out that part of the termination payment that is subject to the termination payments surcharge. The formula calculates this part using 'the number of days in the period of the taxpayer's employment for which the termination payment was made that occurred after 20 August 1996'. The taxpayer's surcharge liability is properly calculated using the date the employment ceased and not the later date of payment of the ETP.
Date of decision: 8 April 1999
Legislative References:
Termination Payments Tax (Assessment & Collection) Act 1997
subsection 9(2)
Other References:
Previously released as CDS10362
Keywords
Superannuation, retirement & employment termination
Eligible Termination Payments
Termination Payments Surcharge
ISSN: 1445-2782
| Date: | Version: | |
| 8 April 1999 | Original statement | |
| You are here | 15 December 2006 | Archived |