Income Tax Assessment Act 1936
Archived:
S 25 repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 52, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
(Repealed by No 15 of 2007)
View history note
Hide history noteS 26AD repealed by No 15 of 2007, s 3 and Sch 1 item 2, applicable to the 2007-2008 income year and later years. S 26AD formerly read:
This section applies to any amount paid after 15 August 1978 (whether voluntarily, by agreement or by compulsion of law) to a taxpayer in a lump sum in consequence of the retirement of the taxpayer after that date from any office or employment or in consequence of the termination after that date of any office or employment of the taxpayer, being an amount that is paid in respect of unused long service leave. Where:
the assessable income of the taxpayer of the year of income shall include the amount of the payment.
SECTION 26AD AMOUNTS RECEIVED ON RETIREMENT OR TERMINATION OF EMPLOYMENT IN LIEU OF LONG SERVICE LEAVE
26AD(1)
[
Lump sum paid re unused long service leave]
26AD(2)
[
Eligible service period commencing after 15 August 1978]
(a)
an amount to which this section applies is paid to a taxpayer in a year of income in respect of unused long service leave; and
(b)
the eligible service period in relation to that unused long service leave commenced after 15 August 1978,
26AD(3) [ Eligible service period commencing before 16 August 1978 - wholly full- or wholly part-time service]
Where:
(a) an amount to which this section applies (in this subsection referred to as the lump sum amount ) is paid to a taxpayer in a year of income in respect of unused long service leave;
(b) the eligible service period in relation to that unused long service leave commenced on or before 15 August 1978 and ended after that date; and
(c) the employment or service of the taxpayer was on a full-time basis during the whole of the eligible service period or was on a part-time basis during the whole of the eligible service period,
the assessable income of the taxpayer of the year of income shall include an amount ascertained in accordance with the formula
where:
A is the lump sum amount;
B is the number of whole days of long service leave included in the unused long service leave in respect of which the lump sum amount was paid;
C is the number of whole days in the eligible service period that occurred after 15 August 1978;
D is the number of whole days of long service leave that accrued in respect of the eligible service period and were used by the taxpayer before the retirement date;
E is the number of whole days in the eligible service period; and
F is:
26AD(3A) [ Application of formula]
Where, in an application of the formula in subsection (3) (including an application of that formula for the purposes of subsection (4)), the component of the formula represented by
comprises a number that is a whole number and a fraction, the fraction shall be disregarded.
S 26AD(3A) inserted by No 149 of 1979.
26AD(4) [ Eligible service period commencing before 16 August 1978 - partly full- and partly part-time service]
Where:
(a) an amount to which this section applies is paid to a taxpayer in a year of income in respect of unused long service leave;
(b) the eligible service period in relation to that unused long service leave commenced on or before 15 August 1978 and ended after that date; and
(c) the employment or service of the taxpayer during the eligible service period was partly on a full-time basis and partly on a part-time basis,
the assessable income of the taxpayer of the year of income shall include an amount equal to the sum of:
(d) the amount that would be calculated in accordance with the formula in subsection (3) if:
(i) the reference in that subsection to the lump sum amount were a reference to so much of the lump sum amount as was paid in respect of unused long service leave that accrued in respect of the employment or service of the taxpayer on a full-time basis;
(ii) a reference in that subsection to whole days of long service leave were a reference to whole days of long service leave that accrued in respect of the employment or service of the taxpayer on a full-time basis; and
(iii) a reference in that subsection to whole days in the eligible service period were a reference to whole days in the eligible service period during which the employment or service of the taxpayer was on a full-time basis; and
(e) the amount that would be calculated in accordance with the formula in subsection (3) if:
(i) the reference in that subsection to the lump sum amount were a reference to so much of the lump sum amount as was paid in respect of unused long service leave that accrued in respect of the employment or service of the taxpayer on a part-time basis;
(ii) a reference in that subsection to whole days of long service leave were a reference to whole days of long service leave that accrued in respect of the employment or service of the taxpayer on a part-time basis; and
(iii) a reference in that subsection to whole days in the eligible service period were a reference to whole days in the eligible service period during which the employment or service of the taxpayer was on a part-time basis.
26AD(5) [ Amount assessable as to 5% only]
Where:
(a) an amount to which this section applies (in this subsection referred to as the " lump sum amount " ) is paid to a taxpayer in a year of income in respect of unused long service leave; and
(b) the eligible service period in relation to that unused long service leave commenced on or before 15 August 1978,
the assessable income of the taxpayer of the year of income shall include, in addition to any amount included in that assessable income by the application of subsection (3) or (4) in relation to the lump sum amount, an amount equal to 5% of the amount remaining after deducting from the lump sum amount any amount included in that assessable income by the application of subsection (3) or (4) in relation to the lump sum amount.
26AD(6) [ Retirement, etc, before entitlement to leave]
A reference in this section to the payment to a taxpayer in consequence of the retirement of the taxpayer from any office or employment or in consequence of the termination of any office or employment of the taxpayer of a lump sum in respect of unused long service leave shall be read as including a reference to the payment to the taxpayer in consequence of that retirement or termination, as the case may be, of an amount in respect of, or an amount calculated directly or indirectly by reference to, long service leave (in this subsection referred to as the " relevant long service leave " ) to which the taxpayer was not entitled immediately before that retirement or termination, as the case may be, but to which the taxpayer would have become entitled, or that would ordinarily have been granted to the taxpayer, at a later time if the taxpayer had continued in that office or employment for a period after the time of the retirement or termination, as the case may be, and, for the purposes of the application of this section in relation to the taxpayer, a reference to the number of whole days of long service leave that accrued in respect of the eligible service period shall be read as a reference to the sum of the number of whole days of long service leave that actually accrued in respect of the eligible service period and the number of whole days included in the relevant long service leave.
26AD(7) [ Definitions]
For the purposes of the application of this section in relation to an amount (in this subsection referred to as the " lump sum amount " ) paid to a taxpayer in consequence of the retirement of the taxpayer from any office or employment or in consequence of the termination of any office or employment of the taxpayer, being an amount paid in respect of unused long service leave:
"eligible service period"
means:
(a) where the taxpayer had not, before the retirement date, used any long service leave to which he became entitled in respect of any office or employment in respect of which the lump sum amount was paid - the period by reference to which the lump sum amount was determined; and
(b) where the taxpayer had, before the retirement date, used long service leave to which he became entitled in respect of any office or employment in respect of which the lump sum amount was paid - the period by reference to which:
(i) the entitlement of the taxpayer to the long service leave that was so used by the taxpayer; and
was determined;
(ii) the lump sum amount,
"retirement date"
means the date on which the taxpayer retired from the office or employment or on which the office or employment of the taxpayer was terminated, as the case may be.
26AD(8) [ " long service leave " defined]
In this section, " long service leave " means:
(a) long service leave, long leave, furlough, extended leave, or leave of a similar kind (however described) to which a person has an entitlement by virtue of a law of the Commonwealth or of a State or Territory, an award, determination or industrial agreement in force under any such law, a contract of employment or the terms of appointment to an office;
(b) leave (other than leave that is annual leave for the purposes of section 26AC ) to which a person has an entitlement by virtue of a scheme or arrangement by reason of the existence and nature of which the employer of the person has secured exemption from obligations to comply with a law of the Commonwealth or of a State or Territory relating to long service leave, long leave, furlough, extended leave or leave of a similar kind (however described); or
(c) leave that may be made available to a person as a privilege, being leave the availability of which is determined by reference to matters similar to matters by reference to which entitlement to leave referred to in paragraphs (a) and (b) is ordinarily determined.
26AD(9) [ Number of whole days of long service leave]
A reference in subsection (3), in relation to a taxpayer, to a number of whole days of long service leave shall be read as a reference to a number of whole days of long service leave in respect of which the taxpayer was paid or was entitled to be paid full or ordinary pay.
26AD(10) [ Where payment for leave at less than full pay]
For the purposes of subsection (3) as affected by subsection (9), where a taxpayer used a number (in this subsection referred to as the " relevant number " ) of days of long service leave and was paid or entitled to be paid in respect of that long service leave at a rate (in this subsection referred to as the " reduced rate " ) of pay that was less than the rate (in this subsection referred to as the " ordinary rate " ) of full or ordinary pay, the taxpayer shall be deemed to have used a number (disregarding fractions) of days of long service leave that bears to the relevant number the same proportion as the reduced rate bears to the ordinary rate and to have been paid full or ordinary pay in respect of the days of long service leave deemed to have been used.
26AD(11) [ Alteration in basis for entitlement to leave]
Where:
(a) an amount to which this section applies is paid to a taxpayer in respect of unused long service leave; and
(b) in consequence of an alteration to the basis on which the entitlement of the taxpayer to long service leave is determined, the period of service or employment of the taxpayer by reference to which the entitlement of the taxpayer to long service leave was determined was shorter than the period (in this subsection referred to as the " full period " ) by reference to which the entitlement of the taxpayer to long service leave would have been determined but for that alteration,
the eligible service period in relation to the payment to the taxpayer of that amount shall be deemed to be the full period.
26AD(12) [ Application of section to Christmas Island residents]
Where:
(a) but for this subsection, an amount would be included in the assessable income of a taxpayer in respect of an amount to which this section applies (in this subsection referred to as the " lump sum amount " ); and
(b) but for former section 24BA, no amount, or lesser amount, would be included in the assessable income of the taxpayer in respect of the lump sum amount,
this section has effect in relation to the lump sum amount as if:
(c) references in the preceding provisions of this section to 15 August 1978 were references to 30 June 1985; and
(d) subsection (5) were omitted.
S 26AD(12) amended by No 101 of 2006 , s 3 and Sch 2 item 183, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and savings provisions see the CCH Australian Income Tax Legislation archive .
S 26AD(12) inserted by No 49 of 1985.
26AD(13) [ Application of section to Cocos (Keeling) Islands residents]
Where:
(a) apart from this subsection, an amount would be included in the assessable income of a taxpayer in respect of an amount to which this section applies (in this subsection called the " lump sum amount " ); and
(b) apart from former section 24BB, no amount, or a lesser amount, would be included in the assessable income of the taxpayer in respect of the lump sum amount;
this section has effect in relation to the lump sum amount as if:
(c) references in the preceding provisions of this section (other than subsection (12)) to 15 August 1978 were references to 30 June 1991; and
(d) subsection (5) were omitted.
S 26AD(13) amended by No 101 of 2006 , s 3 and Sch 2 item 184, by amending references to repealed inoperative provisions, effective 14 September 2006. For application and savings provisions see the CCH Australian Income Tax Legislation archive .
S 26AD(13) inserted by No 100 of 1991.
S 26AD inserted by No 123 of 1978.
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.