House of Representatives

Explanatory Memorandum ERRATUM

Clause 11: Certain items of assessable income

Consistent with the proposed insertion by clause 10 of new section 25A, sub-section (1) of which will re-enact the term of existing paragraph 26(a), paragraph (a) of this clause will omit paragraph 26(a) from the Principal Act. As indicated in the above note on clause 10, new section 25A will apply to sales of property after 23 August 1983 (by virtue of sub-clause 60(8)), whether the property was acquired before or after that date but, in its application other than in respect of sales of property after that date, paragraph 26(a) will continue in effect until the commencement of new section 25A on the date of Royal Assent of the Bill.

By paragraph (b) of clause 11 it is proposed to repeal paragraphs 26(d) and 26(e) of the Principal Act and to substitute a new paragraph 26(e) which will have, with one exception, substantially the same effect as the paragraph 26(e) it replaces.

With some specified exceptions, existing paragraph 26(d) includes in a taxpayer's assessable income 5% of a lump sum amount paid to the taxpayer in consequence of his or her retirement from, or the termination of, any office or employment. The taxation treatment of such amounts will, where paid on or after 1 July 1983, in future be determined under proposed Subdivision AA to be inserted by clause 15.

The proposed new paragraph 26(e), although substantially in the same form as the paragraph it replaces, reflects more contemporary drafting style and also specifically excludes from its ambit eligible termination payments, (see notes on proposed section 27A)