For decision
on
CONFIDENTIAL
Draft
MEMORANDUM FOR EXECUTIVE COUNCIL
XCC
Copy No.
PUBLIC SERVICE : LIMITED COMPENSATION SCHEME
GROSSING UP OF COMPENSATION FOR TAX PURPOSES
FOR OFFICERS SUPERSEDED FOR PROMOTION
THE PROBLEM
It was
the
compensation
original intention that all
payments under the Limited Compensation Scheme
(LCS) should be tax free.
legislation such
However, under existing tax
compensation payments will be exempt only
where the officer is directed to retire. Compensation
payments to
officers who are superseded for promotion will
be taxed in full. It is therefore necessary to gross-up
compensation factors to cover tax liability for officers
superseded for promotion to facilitate localisation.
CONFIDENTIAL
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