Income Tax (Transitional Provisions) Act 1997
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82-10C(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 under your preservation age on the last day of the income year in which you receive the payment.
Note:
You do not pay income tax on directed termination payments: see section 82-10G .
Tax free component
82-10C(2)
The tax free component of the payment is not assessable income and is not exempt income.
Taxable component
82-10C(3)
The taxable component of the payment is assessable income.
82-10C(4)
You are entitled to a tax offset that ensures that the rate of income tax on the amount mentioned in subsection (5) 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 .
82-10C(5)
The amount is so much of the taxable component of the payment as does not exceed your upper cap amount under section 82-10D .
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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