ATO Interpretative Decision

ATO ID 2002/488 (Withdrawn)

Superannuation

Superannuation, retirement & employment termination: Eligible termination payments: superannuation fund payment made directly to the former spouse of the taxpayer
FOI status: may be released

This ATO ID is withdrawn as amendments to the law mean that this ATO ID no longer accurately reflects the ATO view.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Is an amount assessable to the taxpayer as an 'eligible termination payment' (ETP), as defined in subsection 27A(1) of the Income Tax Assessment Act 1936 (ITAA 1936), where it is paid from the taxpayer's superannuation fund directly to the taxpayer's former spouse under a court order?

Decision

Yes, the payment is assessable as an ETP to the taxpayer under the provisions of the ITAA 1936.

Facts

The taxpayer is over 55 years of age and is a member of a superannuation fund as defined in subsection 27A(1) of the ITAA 1936.

The superannuation fund pays an amount directly to the taxpayer's former spouse pursuant to the terms of a court order that relates to a property settlement between the taxpayer and the taxpayer's spouse.

In order to allow the superannuation fund to make the payment directly to the former spouse, the taxpayer must supply a copy of the court order and sign an authority.

Reasons for Decision

An eligible termination payment (ETP) is defined by subsection 27A(1) of the ITAA 1936. Paragraph (b) of the definition states that an ETP includes 'any payment made from a superannuation fund in respect of the taxpayer by reason that the taxpayer is or was a member of the fund...'. Accordingly, the payment need not actually be made to the member, provided it is made 'in respect of' the member.

Subparagraph 27A(3)(a)(ii) of the ITAA 1936 operates to expand the meaning of a payment made 'in respect of the taxpayer' to include a payment made, whether voluntarily, under an agreement or because of a legal obligation, for the benefit of a dependant of the taxpayer. Subsection 27A(1) of the ITAA 1936 provides that a dependant includes another person who was the spouse of the taxpayer.

Alternatively, subparagraph 27A(3)(a)(iii) of the ITAA 1936 operates to expand the meaning of 'in respect of the taxpayer' to include a payment made to another person at the direction or request of the taxpayer.

The payment from the superannuation fund constitutes an ETP of the taxpayer under subsection 27A(1) of the ITAA 1936, as it was made to the taxpayer's former spouse at the direction of the authority signed by the taxpayer. Consequently, the retained amounts of the ETP are included in the assessable income of the taxpayer under sections 27B and 27C of the ITAA 1936.

Date of decision: 12 July 2000

Legislative References:
Income Tax Assessment Act 1936
   section 27B
   section 27C
   subsection 27A(1)
   subparagraph 27A(3)(a)(ii)
   subparagraph 27A(3)(a)(iii)

Other References:
Previously released as CDS 10413

Keywords
Superannuation, retirement & employment termination
Eligible termination payments

Business Line: Superannuation

Date of publication: 30 April 2002

ISSN: 1445-2782

history

	Date:	Version:
	12 July 2000	Original statement
You are here	12 August 2005	Archived

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