Initial lower cap amount is the ETP cap for the income year
(1) Your lower cap amount in relation to a transitional termination payment you receive at a time in an income year is the ETP cap amount for the year, reduced in accordance with this section.
Note: For the ETP cap amount, see section 82-160 of the Income Tax Assessment Act 1997 .
Reduction of lower cap amount in relation to each payment
(2) Reduce your lower cap amount in relation to the payment (but not below zero):
(a) by the amount (if any) (the cap excess ) worked out under subsection (3); and
(b) by so much of the total amounts of transitional termination payments (if any) that you received at an earlier time (whether in the income year or in an earlier income year) for which you are entitled to a tax offset under subsection 82-10A(4).
(3) For paragraph (2)(a), the cap excess is worked out using this method:
Directed termination payments--time of receipt when received by entity to which they are directed
(4) For the purposes of this section, a directed termination payment is taken to be received on your behalf at the time the entity to which it is directed receives the payment.
ETP cap not to be reduced under section 82-10 of the Income Tax Assessment Act 1997
(5) For the purposes of this section, disregard any reduction of the ETP cap amount under section 82-10 of the Income Tax Assessment Act 1997 .