Termination Payments Tax Imposition Act 1997 (Cth)

Termination Payments Tax Imposition Act 1997

Act No. 74 of 1997 as amended

This compilation was prepared on 16 August 2005

taking into account amendments up to Act No. 102 of 2005

The text of any of those amendments not in force

on that date is appended in the Notes section

The operation of amendments that have been incorporated may be

affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,

Attorney‑General’s Department, Canberra

Contents

An Act to impose a termination payments tax and to declare the rate of the tax

1Short title [see Note 1]

This Act may be cited as the Termination Payments Tax Imposition Act 1997.

2Commencement [see Note 1]

This Act commences on the day on which it receives the Royal Assent.

3Interpretation

Expressions used in this Act that are defined by the Termination Payments Tax (Assessment and Collection) Act 1997 have the same meanings as in that Act.

4Imposition of termination payments surcharge

The termination payments surcharge that is payable on a termination payment made to or for a taxpayer under the Termination Payments Tax (Assessment and Collection) Act 1997 is imposed by this Act.

Note: Surcharge is not payable on a termination payment made on or after 1 July 2005—see subsection 7(2) of the Termination Payments Tax (Assessment and Collection) Act 1997.

5Rate of termination payments surcharge

1. (1AA)

   In this section:

higher income amount means:

1. (a)

   for the 2003‑2004 financial year—$114,981; and

2. (b)

   for the 2004‑2005 financial year—that amount as indexed under section 6.

lower income amount means:

1. (a)

   for the 2003‑2004 financial year—$94,691; and

2. (b)

   for the 2004‑2005 financial year—that amount as indexed under section 6.

maximum surcharge percentage means:

1. (a)

   for the 2003‑2004 financial year—14.5%; and

2. (b)

   for the 2004‑2005 financial year—12.5%.

1. (1)

   If the taxpayer’s adjusted taxable income for a financial year (relevant adjusted taxable income) is not less than the lower income amount but is less than the higher income amount, the rate of the termination payments surcharge payable on a termination payment made to or for the taxpayer in that year is the percentage (calculated to 5 decimal places) of the amount of the payment worked out using the formula:

where:

A is:

1. (1A)

   If the percentage calculated under subsection (1) for a financial year would, if it were worked out to 6 decimal places, end with a number greater than 4, the number so calculated is increased by 0.00001.

2. (2)

   If the taxpayer’s adjusted taxable income for a financial year is equal to, or greater than, the higher income amount, the rate of the termination payments surcharge payable in respect of a termination payment made to or for the taxpayer in that year is the maximum surcharge percentage of the amount of the payment.

6Indexation

Indexation of certain amounts for 2004‑05 financial year

1. (1)

   Section 5 applies in relation to an indexing financial year as if each indexable amount were replaced by the amount worked out using the formula:

where:

previous indexable amount means the indexable amount for the financial year immediately before the indexing financial year.

relevant indexation factor means the indexation factor for the indexing financial year.

Rounding off of indexed amounts

1. (2)

   If an amount worked out under subsection (1) is an amount of dollars and cents:

   1. (a)

      if the number of cents is less than 50—the amount is to be rounded down to the nearest whole dollar; or

   2. (b)

      otherwise—the amount is to be rounded up to the nearest whole dollar.

Indexation factor

1. (3)

   The indexation factor for an indexing financial year is the number calculated, to 3 decimal places, using the formula:

where:

current March year means the period of 12 months ending on 31 March immediately before the indexing financial year.

previous March year means the period of 12 months immediately before the current March year.

Rounding up of indexation factor

1. (4)

   If the number calculated under subsection (3) for a financial year would, if it were worked out to 4 decimal places, end with a number greater than 4, the number so calculated is increased by 0.001.

Change in index numbers

1. (5)

   If, at any time, whether before or after the commencement of this Act, the Australian Statistician has published or publishes an index number for a quarter in substitution for an index number previously published for the quarter, the publication of the later index number is to be disregarded.

Indexable amounts to be published

1. (6)

   The Commissioner must publish before, or as soon as practicable after, the start of the 2004‑05 financial year the indexable amounts as replaced under subsection (1) for that year.

Definitions

1. (7)

   In this section:

indexable amount means:

1. (a)

   an amount stated in section 5; or

2. (b)

   if that amount has previously been altered under this section—the altered amount.

indexing financial year means the 2004‑05 financial year.

index number, for a quarter, means the estimate of full‑time adult average weekly ordinary time earnings for the middle month of the quarter published by the Australian Statistician.

Note: For the purposes of this section, Australian Statistician means the Australian Statistician referred to in subsection 5(2) of the Australian Bureau of Statistics Act 1975.

Notes to the Termination Payments Tax Imposition Act 1997

Note 1

The Termination Payments Tax Imposition Act 1997 as shown in this compilation comprises Act No. 74, 1997 amended as indicated in the Tables below.

For all relevant information pertaining to application, saving or transitional provisions see Table A.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Termination Payments Tax Imposition Act 1997	74, 1997	5 June 1997	5 June 1997
Termination Payments Tax Imposition Amendment Act 1997	188, 1997	7 Dec 1997	Schedule 1: 5 June 1997 (a) Remainder: Royal Assent	—
Superannuation (Surcharge Rate Reduction) Amendment Act 2003	112, 2003	12 Nov 2003	Schedule 1: 1 July 2003 Remainder: Royal Assent	Sch. 1 (item 32)
Superannuation Budget Measures Act 2004	106, 2004	30 June 2004	30 June 2004	Sch. 2 (item 11(1))
Superannuation Laws Amendment (Abolition of Surcharge) Act 2005	102, 2005	12 Aug 2005	12 Aug 2005	—

(a) Subsection 2(2) of the Termination Payments Tax Imposition Amendment Act 1997, provides as follows:

1. (2)

   Schedule 1 is taken to have commenced on 5 June 1997, immediately after the commencement of the Termination Payments Tax Imposition Act 1997.

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
Note to s. 4............................	ad. No. 102, 2005
S. 5 .......................................	am. No. 188, 1997; No. 112, 2003; No. 106, 2004; No. 102, 2005
Subhead. to s. 6(1)................	am. No. 112, 2003; No. 102, 2005
S. 6 .......................................	am. No. 112, 2003; No. 102, 2005

Table A

Application, saving or transitional provision

Superannuation (Surcharge Rate Reduction) Amendment Act 2003

(No. 112, 2003)

Schedule 1

32

Application of amendments made by Part 1

The amendments made by Part 1 apply in relation to liability to surcharge in respect of the 2003‑04 financial year and later financial years.

Note: The Acts amended by Part 1 continue to apply in relation to liability to surcharge in respect of financial years that ended before 1 July 2003 as if the amendments made by Part 1 had not been made.

Superannuation Budget Measures Act 2004 (No. 106, 2004)

Schedule 2

11

Application of amendments

(1) The amendments made by Part 1 of this Schedule apply in relation to liability to surcharge in respect of the 2004‑05 financial year and later financial years.