More Sites

Govt ups taxes on golden handshakes

Reported by AAP
Tuesday, May 8, 2012
Super-rich getting richerThe world's super-rich could actually be wealthier than anyone first thought.

High powered executives will pay more tax on golden handshakes as part of measures by the federal government to increase its revenues.

The government expects to save $196.4 million over the coming four financial years by cutting back the availability of a tax offset on employment termination payments.

From July 1 the offset will only be available for payments that take a person's annual income up to $180,000, and payments above that amount will be taxed at marginal rates, the government said in its budget papers.

The offset ensures termination payments are taxed at a maximum of 15 per cent.

"The employment termination payment tax offset can currently be used to reduce tax payable on payments included in remuneration packages such as 'golden handshakes', among other things, which are not related to genuine hardship," the government said.

"This primarily benefits high income earners who are more likely to receive such payments and receive much larger payments when they do."

Termination payments for genuine redundancies, invalidity and compensation for employment disputes or deaths will not be affected by the changes.

The government has also tightened tax concessions for people working interstate and for foreigners working in Australia.

Under the previously announced changes, workers will have to demonstrate they rent or own a second home interstate to receive the Living Away From Home Allowance.

Workers will also have to substantiate their expenses while away from home.

01/09/2014 21:18Sydney, Australia. 1 September,2014
advertisement