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 section 27F of the Income Tax Assessment Act 1936?

Taxation Determination TD 93/17 sets out the reasons why a redundancy payment made by a redundancy trust does not satisfy section 27F of the Income Tax Assessment Act 1936 (ITAA 1936).

Section 27F of the ITAA 1936 has been repealed by the Superannuation Legislation Amendment (Simplification) Act 2007 and replaced with the equivalent section 83-175 of the Income Tax Assessment Act 1997 (ITAA 1997) which describes what a genuine redundancy payment is (formerly called a bona fide redundancy payment).

Taxation Ruling TR 2009/2 - Income tax: genuine redundancy payments now provides the Commissioner's view on the operation of section 83-175 of the ITAA 1997 on what a genuine redundancy payment is. In particular, Example 11 (dealing with project-based contracts) in paragraphs 148 to 154 of TR 2009/2 addresses the situation previously dealt with in TD 93/17. As this Determination is no longer required, it is withdrawn.