27 Mar 1414 Pension payments from World Bank exempt from tax - Macoun
The AAT (Tamberlin QC DP) has held that pension payments received by the taxpayer following his retirement from the International Bank for Reconstruction and Development (IBRD), a corporate organisation of the World Bank, with whom he worked for approximately 14 years, were exempt from tax under item 2 of Part 1 of the Fourth Schedule to the International Organisation (Privileges and Immunities) Act 1963.
The AAT said, at paras 34-37:
"The Applicant’s [taxpayer's] entitlement to the pension payments, and therefore the payments themselves, were impressed with the character of payments arising from employment. They were a part of the remuneration entitlement which crystallised during the course of the Applicant’s employment. This entitlement did not cease on termination of his employment. It continued and indeed has been paid and is being received by the Applicant.
The Respondent [Commissioner] submits however that the right and entitlement to a pension payment only arises after the employment was ended because only at that time could the precise amount be calculated and payable.
I do not accept this argument because in my view the character of the payment was a vested entitlement prior to the termination of the employment. The fact of employment and the rendering of services during his term of employment was the factor which gave the Applicant the right to payment. The precise amounts to be paid did not need to be determined in order for his entitlement to vest as part of his remuneration rights.
The above conclusion is consistent with a reasonable commercial expectation on the part of the employee. The generous compulsory pension benefits were clearly part of an overall remuneration package which could be expected to provide a strong incentive to accept the position, especially given the personal inconveniences and disruption consequent on taking up a regular position with an international organisation overseas."
Macoun and FCT  AATA 155 (AAT, Tamberlin QC DP), 20 March 2014).