Document ID: chunk:federal_register_of_legislation:C2024C00267:section:8:p7
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 8 (pt 7/48)
Character Range: 246342–248933

The low rate part is so much of the taxable component of the payment as does not exceed your lower cap amount under section 82‑10B.
 (7) The middle rate part is so much of the taxable component of the payment as:
 (a) exceeds your low rate part (if any); and
 (b) does not exceed the amount worked out as follows:

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).

82‑10B  Lower cap amount

Initial lower cap amount is the ETP cap for the income year
 (1) Your lower cap amount in relation to a transitional termination payment you receive at a time in an income year is the ETP cap amount for the year, reduced in accordance with this section.
Note: For the ETP cap amount, see section 82‑160 of the Income Tax Assessment Act 1997.

Reduction of lower cap amount in relation to each payment
 (2) Reduce your lower cap amount in relation to the payment (but not below zero):
 (a) by the amount (if any) (the cap excess) worked out under subsection (3); and
 (b) by so much of the total amounts of transitional termination payments (if any) that you received at an earlier time (whether in the income year or in an earlier income year) for which you are entitled to a tax offset under subsection 82‑10A(4).
 (3) For paragraph (2)(a), the cap excess is worked out using this method:

      Method statement
           Step 1. Work out the total of the taxable components of all the amounts (if any) of transitional termination payments received by you (including any directed termination payments received on your behalf) in any income year before the income year in which you reached your preservation age.
           Step 2. Work out the total of the taxable components of all the directed termination payments (if any) received on your behalf at an earlier time, in the income year in which you reached your preservation age or later.
           Step 3. Work out the amount (the cap difference) by which $1,000,000 exceeds the ETP cap for the income year in which you receive the payment to which subsection (1) applies.
           Step 4. The cap 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