25 Jun 07 Decision Impact Statement - LongThe ATO has published a Decision Impact Statement in relation to the AAT decision in Helen Ann Long and FCT  AATA 1269. The case concerned the question of whether an eligible termination payment (ETP) is a bona fide redundancy payment where the person terminated is both employee and director of the employer, and also whether the amount paid was reasonable.
The Decision Impact Statement states:
"The Commissioner considers that the outcome in this case is one limited to the facts found by the Tribunal. In his decision, Senior Member Pascoe stated that decisions in cases of this nature depended on their particular facts. If a matter demonstrates essentially the same factual scenario as found by Senior Member Pascoe, the Commissioner will apply the outcome in this case. In matters that are factually inconsistent with this decision, the Commissioner will apply the law as reflected in the general principles set out in TR 94/12.
Nevertheless, the Commissioner accepts that the mere fact that an employee is involved in a decision to terminate their own employment may not automatically lead to a conclusion that the employee was not 'dismissed' by reason of having 'consented' to the termination decision in their capacity as an employee...
It is intended that TR 94/12, the current ATO ruling dealing with the treatment of BFRPs under section 27F, will be rewritten to incorporate the recent rewrite of the provision (section 83-175 of the Income Tax Assessment Act 1997, to apply from 1 July 2007) and a number of other cases that have considered issues under section 27F in recent years. It is intended that the rewrite will consider the issues dealt with in this case. The Commissioner considers that the general views expressed in TR 94/12 are correct and will continue to apply.
The Commissioner also considers that the facts underlying ATO ID 2001/529 reveal a termination decision made by a dual capacity employee, precipitated by a voluntary sale of a business, to which the employee consented. Therefore, the Commissioner's view is that this ATO ID reflects a correct application of the relevant principles to the facts there stated."
For a copy of the Decision Impact Statement DIS VT2004/237, go here