Income Tax Assessment Act 1936

Subdiv AA (heading) substituted by No 15 of 2007, s 3 and Sch 1 item 59, applicable to the 2007-2008 income year and later years. The heading formerly read:

Subdivision AA - Superannuation, termination of employment and kindred payments

Subdiv AA inserted by No 47 of 1984.

S 27ACA repealed by No 15 of 2007, s 3 and Sch 1 item 3, applicable to the 2007-2008 income year and later years. S 27ACA formerly read:

SECTION 27ACA EFFECT OF PAYMENT SPLIT UNDER THE FAMILY LAW ACT 1975 ON ELIGIBLE TERMINATION PAYMENTS  
27ACA(1) ETP for non-member spouse.  

If:

(a) a payment split applies to a splittable payment; and

(b) as a result:

(i) a payment is made to the non-member spouse (or to his or her legal personal representative if he or she has died); or

(ii) an interest in a superannuation fund, or an annuity, is created for, or an amount is transferred to a superannuation fund for the benefit of, the non-member spouse in circumstances prescribed by the regulations; and

(c) either:

(i) the payment mentioned in subparagraph (b)(i); or

(ii) a payment equal to the value of the interest or annuity created or the amount transferred mentioned in subparagraph (b)(ii);

if it had been made to the original payee, would have been an eligible termination payment under a paragraph of the definition of eligible termination payment in subsection 27A(1) ;

then the payment is taken to be an eligible termination payment (the new ETP ) in relation to the non-member spouse under:

(d) if the splittable payment becomes payable before the death of the member spouse - that same paragraph; or

(e) otherwise - paragraph (ba) of that definition.

Example:

A has a superannuation interest that is subject to 2 payment splits in respect of A ' s marriages to B and C (in that order). The first payment split provides for a 60% share to B and the second payment split provides for a 50% share to C.

Assume that any payment to B or C would have been an eligible termination payment for A (if the payment had been made to A). A becomes entitled to a splittable payment of $100.

By applying subsection (1) in relation to the first payment split, B gets an eligible termination payment of $60.

By applying subsection (1) in relation to the second payment split, C gets an eligible termination payment of $20.

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History

S 27ACA(1) amended by No 78 of 2005.

27ACA(1A) ETP taken to be rolled over in some cases.  

There is taken to be a roll-over of the new ETP in a case to which subparagraph (1)(b)(ii) applies.

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History

S 27ACA(1A) inserted by No 78 of 2005.

27ACA(2) Calculation of components of new ETP.  

Each identified component of the new ETP is to be worked out in accordance with the following formula:

New ETP     Pre-split amount

×

Corresponding amount

where:

corresponding amount
means the amount that would have been that component if the whole of the pre-split amount had been an eligible termination payment in relation to the original payee.

pre-split amount
means the amount to which the payment split was applied.

Example:

To continue the example in subsection (1), assume A ' s undeducted contributions (one of the identified components) are $40.

In relation to B, the pre-split amount is $100 (the amount of the splittable payment). The undeducted contributions component of B ' s eligible termination payment is:

$60   $100

×   $40   =   $24

The other identified components of B ' s eligible termination payment are worked out in a corresponding way.

In relation to C, the pre-split amount is $40 (the original amount of $100 less the $60 paid to B under the first payment split). A ' s undeducted contributions have been reduced to $16. The undeducted contributions component of B ' s eligible termination payment is:

$20   $40

×     $16     =     $8

The other identified components of C ' s eligible termination payment are worked out in a corresponding way.

27ACA(3) [Eligible service period]  

For the purposes of working out all the components of the new ETP, the number of days in the eligible service period is taken to be zero.

27ACA(4) ETP for original payee.  

If there is an eligible termination payment (the original ETP ) in relation to the original payee in respect of the splittable payment, then each identified component of the original ETP is to be worked out in accordance with the following formula:

Original ETP   Pre-split amount

×

Corresponding amount

where:

corresponding amount
means the amount that would have been that component if the whole of the pre-split amount had been an eligible termination payment in relation to the original payee.

pre-split amount
means the amount to which the payment split was applied.

Example:

To continue the example in subsections (1) and (2), A has an eligible termination payment of $20.

In relation to A, the pre-split amount is $40 (the original amount of $100 less the $60 paid to B under the first payment split). The undeducted contributions component of A ' s eligible termination payment is:

$20   $40

×     $16     =     $8

The other identified components of A ' s eligible termination payment are worked out in a corresponding way.

27ACA(5) Definitions.  

In this section:

identified component
, in relation to an eligible termination payment, means any of the following:

(a) the concessional component;

(b) the post-June 1994 invalidity component;

(c) the CGT exempt component;

(d) the undeducted contributions;

(e) the untaxed element of the post-June 83 component.

non-member spouse
(Repealed by No 78 of 2005)

original payee
means the person to whom the splittable payment would have been made but for the payment split.

payment split
(Repealed by No 78 of 2005)

splittable payment
(Repealed by No 78 of 2005)

S 27ACA inserted by No 114 of 2001.