Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-40 - RULES AFFECTING EMPLOYEES AND OTHER TAXPAYERS RECEIVING PAYG WITHHOLDING PAYMENTS  

Division 82 - Employment termination payments  

Subdivision 82-B - Employment termination payments: death benefits  

Operative provisions

SECTION 82-70   Death benefits for non-dependants  

Tax free component

82-70(1)    
The *tax free component of a *death benefit termination payment that you receive after the death of a person of whom you are not a *death benefits dependant is not assessable income and is not *exempt income.

Taxable component

82-70(2)    
If you receive a *death benefit termination payment after the death of a person of whom you are not a *death benefits dependant, the *taxable component of the payment is assessable income.

82-70(3)    
You are entitled to a *tax offset that ensures that the rate of income tax on the amount mentioned in subsection (4) does not exceed 30%.

Note:

The remainder of the taxable component is taxed at the top marginal rate in accordance with the Income Tax Rates Act 1986 .

82-70(4)    
The amount is so much of the *taxable component of the payment as does not exceed the *ETP cap amount.

Note:

For the ETP cap amount, see section 82-160 .

82-70(5)    
The *ETP cap amount is reduced (but not below zero) by the amount worked out under subsection (4) for each *death benefit termination payment (if any) you have received earlier in consequence of the same employment termination, whether in the income year or an earlier income year.

Note 1:

See subsection 82-75(3) for the tax treatment of any amount by which you may have benefited from an employment termination payment to the trustee of the estate of the deceased.

Note 2:

If you have also received a life benefit termination payment in the same income year, your entitlement to a tax offset under this section is not affected by your entitlement (if any) to an offset for the life benefit termination payment (under section 82-10 ).