Income Tax (Transitional Provisions) Act 1997
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82-10A(1)
This section applies to a transitional termination payment you receive (except any part of the payment that is a directed termination payment) if you are your preservation age or older on the last day of the income year in which you receive the payment.
Note 1:
You do not pay income tax on directed termination payments: see section 82-10G .
Note 2:
Under section 82-10C , you may also be entitled to a tax offset on the taxable component of a transitional termination payment you receive in an income year before the year in which you reached your preservation age.
Tax free component
82-10A(2)
The tax free component of the payment is not assessable income and is not exempt income.
Taxable component
82-10A(3)
The taxable component of the payment is assessable income.
82-10A(4)
You are entitled to a tax offset that ensures that the rate of income tax on the amount mentioned in subsection (6) (the low rate part ) does not exceed 15%.
82-10A(5)
You are entitled to a tax offset that ensures that the rate of income tax on the amount mentioned in subsection (7) (the middle rate part ) does not exceed 30%.
Note:
The remaining part is taxed at the top marginal rate in accordance with the Income Tax Rates Act 1986 .
82-10A(6)
The low rate part is so much of the taxable component of the payment as does not exceed your lower cap amount under section 82-10B .
82-10A(7)
The middle rate part is so much of the taxable component of the payment as:
(a) exceeds your low rate part (if any); and
(b) does not exceed the amount worked out as follows:
| Your upper cap amount under
section 82-10D |
− | Your lower cap amount under
section 82-10B |
Note:
If you have received another life benefit termination payment in the same income year (or in an earlier income year) that is not a transitional termination payment, your entitlement to a tax offset under this section is not affected by your entitlement (if any) to a tax concession for the other payment (under section 82-10 of the Income Tax Assessment Act 1997 ).
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