Issue
Is termination payments surcharge payable on an eligible termination payment (ETP) from an employee share acquisition scheme?
Decision
No. An ETP from an employee share acquisition scheme is not a 'termination payment' as defined in subsection 7(2) of the Termination Payments Tax (Assessment and Collection) Act 1997 (TPTA) and is therefore not subject to termination payments surcharge.
Facts
The taxpayer received an eligible termination payment after 20 August 1996.
The taxpayer's adjusted taxable income was above the surcharge threshold for the year of income.
The taxpayer produced documentary evidence to show that the ETP received was from an employee share acquisition scheme.
Reasons for Decision
Termination payments surcharge is payable on certain termination payments. Subsection 7(2) of the TPTA specifically excludes from the definition of a termination payment the retained amount of any post-June 1994 invalidity component and Capital Gains Tax exempt component of such a payment, and an ETP from an employee share acquisition scheme.
The taxpayer informed the Commissioner of Taxation that the ETP received was from an employee share acquisition scheme and as such is not subject to the termination payments surcharge.