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Tax Q - Retrenched by overseas company

Discussion in 'Accounting, Tax & Legal' started by gidxg03, 1st Aug, 2011.

  1. gidxg03

    gidxg03 New Member

    Joined:
    1st Aug, 2011
    Posts:
    1
    Location:
    Melbourne
    Hi all,

    Since moving to Australia from Ireland 3 years ago my wife has continued to work for her overseas employer, paying tax in Ireland and Australia on her overseas income. However we have found out today that it is likely she will be made redundant very shortly. My questions is she will have to pay tax in Ireland on any redundancy payment she receives. What would be her tax implications in Australia?

    Would this fall under genuine redundancy payments as it is not voluntary? According to the ATO:

    Genuine redundancy payments

    Genuine redundancy payments you receive are tax-free up to a limit based on your years of service with the employer.

    For the year ended 30 June 2012, the tax-free limit is $8,435, plus $4,218 multiplied by the years of service.

    She has 11 years service:

    $8,435 + ($4,218 x 11) = $8,435 + $46,398 = $54,833

    Would anything above this be taxed at 31.5% and if so would the tax she has to pay in Ireland count against any payment here?