This Ruling outlines the requirements to be satisfied before any payment made to a person whose employment is terminated qualifies for treatment as a genuine redundancy payment under s 83-175 of the ITAA 1997. Genuine redundancy payments are tax-free up to a limit worked out under s 83-170. The Ruling also discusses the interaction between the tax treatment of genuine redundancy payments and the tax treatment of other termination payments provided for by Divisions 82 and 83.
For a copy of TR 2009/2, go here.
As a result of the issue of TR 2009/2, the ATO withdrew the following with effect from 22 April 2009:
- TD 1993/14 Income tax: can a payment in lieu of notice, on termination of employment, be treated as a bona fide redundancy payment?
- TD 1993/17 Income tax: is a redundancy payment from a redundancy trust, established based on the Building Industry Agreement of 1 October 1987, considered to be a bona fide redundancy payment under s 27F of the ITAA 1936?