Ermelinda Kovacs, instructed by Jones Day, successfully appeared for the taxpayer in the recently decided Fidge v Commissioner of Taxation [2023] AATA 4245.

The Tribunal set aside the Commissioner’s objection decision, finding that a full-time army colonel of the Permanent Forces who was involuntarily transferred to the Army Reserves was entitled to concessional income tax treatment in relation to an associated ‘special benefit payment’ he had received, on the basis that the payment constituted a ‘genuine redundancy payment’ within the meaning of s 83-175(1) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997).

The concept of “office” is, under s 80-5 of the ITAA 1997, the “gateway” into s 83-175(1) for a person, such as Colonel Fidge, who is not an employee. The Tribunal found that the “office” held by Colonel Fidge was his office as a Colonel in the Regular Army within the meaning of the Defence Act 1903 (Cth).