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Undeducted Purchase Price (UPP)

The Undeducted Purchase Price (UPP) is that part of the amount contributed towards a pension or annuity which was not and will not be allowed as a tax deduction. The UPP is one of the factors used to determine the tax free component. The person's income stream provider calculates the UPP.



The tax free component is an amount calculated by the income stream provider under either Subdivision 307-C of the Income Tax Assessment Act 1997 or section 307-125 of the Income Tax (Transitional Provisions) Act 1997. The tax free component is the same as the deductible amount for DVA purposes and reduces the amount of assessable income from a defined benefit income stream.



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