Taxation Determination TD 94/62







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. Yes. We consider that a payment in lieu of notice is an eligible termination payment as it is made 'in consequence of' a termination of employment in terms of paragraph 27A(1)(a). | Examples : 1. An employer dismisses an employee without giving notice. Under the particular award a payment in lieu of notice must be made. The amount received as a payment in lieu is made as a consequence of the termination of employment and is therefore an eligible termination payment. | 2. An employer is required to give notice of termination of employment to an employee who is to be dismissed. When the period of notice ends, the employment is terminated. During the period of notice the employee continues to perform his or her duties. The remuneration received during this period is salary or wage income. | Commissioner of Taxation 07/07/94 | Previously issued as Draft TD 93/D179


Related rulings: TD 93/14
Legislative references: ITAA 27A(1); ITAA 27AA(1); ITAA 27E; ITAA 27F;
Subject references: eligible termination payment; payments in lieu of notice; termination and suspension of employment; dismissal bona fide redundancy payment; approved early retirement scheme.