Termination Payments Tax Imposition Act 1997

[Assented to 5 June 1997]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Termination Payments Tax Imposition Act 1997.

2 Commencement

This Act commences on the day on which it receives the Royal Assent.

3 Interpretation

Expressions used in this Act that are defined by the Termination Payments Tax (Assessment and Collection) Act 1997 have the same meanings as in that Act.

4 Imposition of termination payments surcharge

The termination payments surcharge that is payable on a termination payment made to or for a taxpayer under the Termination Payments Tax (Assessment and Collection) Act 1997 is imposed by this Act.

5 Rate of termination payments surcharge

(1) If the taxpayer’s adjusted taxable income for a financial year (relevant adjusted taxable income) is not less than $70,000 but is less than $85,000, the rate of the termination payments surcharge payable on a termination payment made to or for the taxpayer in that year is the percentage of the amount of the payment worked out using the formula:

(2) If the taxpayer’s adjusted taxable income for a financial year is $85,000 or a higher amount, the rate of the termination payments surcharge payable in respect of a termination payment made to or for the taxpayer in that year is 15% of the amount of the payment.

6 Indexation

Indexation of certain amounts for 1997-98 financial year and later financial years

(1) Section 5 applies in relation to an indexing financial year as if each indexable amount were replaced by the amount worked out using the formula:

where:

previous indexable amount means the indexable amount for the financial year immediately before the indexing financial year.

relevant indexation factor means the indexation factor for the indexing financial year.

Rounding off of indexed amounts

(2) If an amount worked out under subsection (1) is an amount of dollars and cents:

(a) if the number of cents is less than 50—the amount is to be rounded down to the nearest whole dollar; or

(b) otherwise—the amount is to be rounded up to the nearest whole dollar.

Indexation factor

(3) The indexation factor for an indexing financial year is the number calculated, to 3 decimal places, using the formula:

where:

current March year means the period of 12 months ending on 31 March immediately before the indexing financial year.

previous March year means the period of 12 months immediately before the current March year.

Rounding up of indexation factor

(4) If the number calculated under subsection (3) for a financial year would, if it were worked out to 4 decimal places, end with a number greater than 4, the number so calculated is increased by 0.001.

Change in index numbers

(5) If, at any time, whether before or after the commencement of this Act, the Australian Statistician has published or publishes an index number for a quarter in substitution for an index number previously published for the quarter, the publication of the later index number is to be disregarded.

Indexable amounts to be published

(6) The Commissioner must publish before, or as soon as practicable after, the start of the 1997-98 financial year, and before the start of each later financial year, the indexable amounts as replaced under subsection (1) for that year.

Definitions

(7) In this section:

indexable amount means:

(a) an amount stated in section 5; or

(b) if that amount has previously been altered under this section—the altered amount.

indexing financial year means the 1997-98 financial year or a later financial year.

index number, for a quarter, means the estimate of full-time adult average weekly ordinary time earnings for the middle month of the quarter published by the Australian Statistician.

Note: For the purposes of this section, Australian Statistician means the Australian Statistician referred to in subsection 5(2) of the Australian Bureau of Statistics Act 1975.

[Minister’s second reading speech made in—

House of Representatives on 13 February 1997

Senate on 25 March 1997]

(12/97)

I HEREBY CERTIFY that the above is a fair print of the Termination Payments Tax Imposition Bill 1997 which originated in the House of Representatives as the Termination Payments Surcharge Imposition Bill 1997 and has been finally passed by the Senate and the House of Representatives.

Clerk of the House of Representatives

IN THE NAME OF HER MAJESTY, I assent to this Act.

Governor-General

May 1997