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Unused_Long_Service_Leave

Unused_Long_Service_Leave - 532 Australian Master Tax...

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Unformatted text preview: 532 Australian Master Tax Gliid‘e M 111 1—730 UNUSED LONG SERVICE LEAVE PAYMENTS Payments for unused long service leave are not employment terminatio‘ payments (1111610). Instead, certain parts of the payment are concessionally meg under ITAA97 Subdiv 83-B (3 83—65 to 83-115). The concessional rules apply 13011111113 sum payments to a taxpayer in consequence of retirement from, or termination of, an office or employment after 15 August 1978. For these purposes, the meaning of “in consequence of” the termination of employment discussed at 1l1 1-610 is also relevant. Unused long service leave payments to a deceased employee’s beneficiaries or {‘3‘ the trustee of the deceased’s estate are exempt from tax (ITAA36 s 101A(2)). " Amount included in assessable income A taxpayer’s assessable income in the year that an unused long service lea“ payment is made includes: 0 5% of that part of the payment — to the extent that the payment is attributable ta . the pre-l 6/8/78 period c 100% of that part of the payment — to the extent that the payment is attributabm; to the pie-18/8/93 period, and ‘5 O 100% of that part of the payment # to the extent that the payment is attributab. to the post-17/8/93 period (5 83-80(1)). ‘ The remainder of that part (if any) of an unused long service leave paymenttha. is attributable to the pre-16/8/78 period is not assessable income and is not arming income (5 83-80(2)). The amount included in the taxpayer’s assessable income under s 83—80(1) taxed at the taxpayer’s marginal rates. A tax offset applies to ensure that the rate oftn} on assessable income is limited to a maximum rate of 30%: O to the extent that it is attributable to the pre—18i8/93 period, and I to the extent that it is attributable to the post-17/8/93 period if it the payment made in connection with a payment that includes, or consists of, any of ‘1“- following: ‘ — a genuine redundancy payment (fill-700) or an early retirement scheel- payment (1| 1 1-7 10), or , an invalidity segment of an employment termination payment 0; superannuation benefit ('lll 1-640). Medicare levy and, if applicable, levy surcharge is payable on the amount" unused annual leave payment included in assessable income. ’ ' 1: if! PAYG withholding appiies to the assessable amounts of unused long 1‘1 payments according to the schedules issued by the Commissioner (1126-400). The apportionment of assessable income into the various parts attributable to 'E‘ pre—l6/8/78 period, pre—18/8/93 period and post—l7/8/93 period is based on the 1'0" service leave employment period in relation to the unused long service leave. _' amount of payment attributable to each period is worked out using the moth?[1 " formula provided in 5 83-95 . A taxpayer is assessed on the amount actually recel ‘ ;_ a particular year even if the amount, or part of the amount, could be said to relate .f payment that would normally have been payable in the next financial year (Hanna -. 1111-730 ...
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