Income Tax Assessment Regulations 1997
METHOD OF WORKING OUT AMOUNT OF NOTIONAL TAXED CONTRIBUTIONSPART 4 - EXERCISE OF DISCRETION TO PAY A BENEFIT GREATER THAN THE BENEFIT ASSUMED IN CALCULATING THE NEW ENTRANT RATE 4.1 Method of working out W in the formula in section 1.8 4.1(1)
If a discretion is exercised to pay a benefit upon:
(a) voluntary exit; or
(b) redundancy that is not bona fide;
which is greater than the benefit assumed in calculating the new entrant rate, the excess of the actual benefit paid over the amount of the assumed benefit at the time the actual benefit is paid ( W ) forms part of the amount of notional taxed contributions for the member for the financial year in which the benefit is paid.4.1(2)
For the formula in section 1.8:
(a) in a financial year in which the trustee does not exercise a discretion to pay a benefit to the member which is greater than the assumed benefit, W equals zero; and
(b) in any other financial year, W equals an amount worked out on advice from an actuary that represents the excess of the actual benefit paid to the member over the amount of the assumed benefit at the time the actual benefit is paid.
If the trustee decides to pay an untaxed benefit rather than a taxed benefit, any excess of the amount of the untaxed benefit over the amount of the taxed benefit that would otherwise have been payable is not to be included in W .