I am being made redundant by a large corporate after 14 years service. They have deemed it to be a genuine redundancy, and as such a significant component of my payment will be tax-free up to the relevant limit. My question is: are there any circumstances where the redundancy might be deemed non-genuine by the ATO, and if so, who would be liable for the payment of the tax associated with a non-genuine redundancy? They are including a component of a 'golden handshake' payment and as such, want me to sign a deed of release that I won't take legal action against them in the future. I'm trying to make sure I'm adequately protected before signing the deed of release in case I could potentially be liable for a large tax bill in the future. Many thanks
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Hiya @ARHRadmin 👋
ATO guidance defines what a non-genuine redundancy is within the context of the Fair Work definition of a genuine redundancy. How the ATO may detect likely non-genuine redundancies from genuine redundancies reported by employers to the ATO is complex and part of ATO's compliance and assurance activities 😉
If there was a non-genuine redundancy confirmed, the tax would be payable by you. There are a number of other factors that may contribute to that 🤓
It is best that you engage an employment lawyer to assess your personal circumstances and those of a genuine redundancy before you sign a legal document that may limit or extend your liability. 🫣
Deanne
Thanks, Deanne - much appreciated
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