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Having the correct classification of how employment ends is important. Describing the termination as a voluntary resignation in circumstances that indicate otherwise could have significant adverse tax consequences to the employee. This article explores the taxing of settlement receipts received in relation to the termination of employment. We recently came across an employment termination scenario where the matter was settled by a deed of release resolving/withdrawing a Fair Work claim. The deed stated (as is common) that the termination of employment occurred ‘…by way of the Employee’s resignation by operation of this deed’. While this language may be preferred by the employer Kay Kim

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