Document ID: chunk:federal_register_of_legislation:C2024C00267:section:8:p8
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 8 (pt 8/48)
Character Range: 248716–251323

excess is the amount (not less than zero) by which the sum of the amounts in steps 1 and 2 exceeds the cap difference in step 3.

Directed termination payments—time of receipt when received by entity to which they are directed
 (4) For the purposes of this section, a directed termination payment is taken to be received on your behalf at the time the entity to which it is directed receives the payment.

ETP cap not to be reduced under section 82‑10 of the Income Tax Assessment Act 1997
 (5) For the purposes of this section, disregard any reduction of the ETP cap amount under section 82‑10 of the Income Tax Assessment Act 1997.

82‑10C  Recipient under preservation age

Application
 (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
 (2) The tax free component of the payment is not assessable income and is not exempt income.

Taxable component
 (3) The taxable component of the payment is assessable income.
 (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.
 (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).

82‑10D  Upper cap amount

Initial upper cap amount is $1,000,000
 (1) Your upper cap amount in relation to a transitional termination payment you receive at a time in an income year is $1,000,000, reduced in accordance with this section.

Reduction of upper cap amount for each payment
 (2) Reduce your upper cap amount in relation to the payment (but not below zero):
 (a) by the total of all the amounts (if any) included in your assessable income under subsection 82‑10C(3) and subsection 82‑10A(3) that you received at an earlier time (whether in the income year or in an earlier income year); and
 (b)