Taxes on severance benefits

Q: I would like to find out if an employee was given the 45 days notice on a redundancy and they took the option of payment In Lieu of notice, would this amount be taxed?

A: According to section 5(6) of the Income Tax Act 1938, as amended,

"... where under a contract of employment the employer is liable to pay an amount by way of severance pay upon the termination of the employment of an employee by reason of the redundancy of the position held by the employee or upon the retirement, or other termination of the employment, by reason of ill-health—

• (a) so much of the amount as does not exceed three hundred thousand dollars shall be exempt from tax

*Section 5(7) gives a definition of the term:“severance pay” includes any payment in lieu of notice and any payment made in relation to past service of the employee;

Section 34 Privy Council judgement

The judgement by the Judicial Committee of the Privy Council in the conjoined matters of Steve Ferguson, Maritime Life (Caribbean) Limited and others & Ameer Edoo v the AG of Trinidad and Tobago was delivered on 25 January 2016. Here's a copy.

Joint Tenancy v Intestacy

Q:
Hello,

My intestate father died leaving his estate. Although you informed me that his wife gets half and the children the other half; if his properties were Joint Tenancy with his wife, are the children still entitled to half his estate?

Thanks,

Curtis

 

A: 

In a joint tenancy, intestacy rules do not apply. Instead, we must rely on the “right of survivorship”. Survivorship means that when a Joint Tenant dies, his/her heirs have no claim in the property because the property is left for the surviving joint tenants ONLY.

This is usually a problem when a step-parent comes into the picture and s/he doesn't have a good relationship with the children from a previous relationship - those children usually get nothing.