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The AAT has held that a payment received by a taxpayer was not an exempt non-resident foreign termination payment within the meaning of that term in s 27A(1) of ITAA 1936 and was, therefore, subject to tax in Australia as an eligible termination payment. The taxpayer argued she received 2 discrete payments for 2 distinct periods of service (one of which was for service in the United Kingdom) and that the payments should be treated separately for tax purposes. Although the AAT held that the simple question of whether there was one payment or two was not fatal to the taxpayer’s claim, the taxpayer had not discharged the burden of proof under s 14ZZK(1) of the Taxation Administration Act 1953. In particular, the taxpayer had not "established that this was how the employer made the payment or payments. She has not demonstrated any agreed formula related back to the period of her foreign service. She has not shown that any particular amount was paid "in respect of" this service."

A Taxpayer and FCT [2006] AATA 980 (AAT, Hunt SM, 20 November 2006).

For a copy of the decision, go here

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