Taxation Laws Amendment Act 1994 (56 of 1994)

Part 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 10   Life assurance companies and registered organizations

81   Insertion of new section

After section 116GD of the Principal Act the following section is inserted:

Reinsurance recoveries and refunds of premiums not assessable income

"116GE. (1) If:

(a) a registered organization has entered into a contract of reinsurance in respect of the whole or any part of a life assurance policy; and

(b) a premium paid or payable by the organization under the contract of reinsurance is not an allowable deduction to the organization because of paragraph 116HAD(1)(c);

the organization's assessable income does not include:

(c) any amount received or recovered by it under the contract of reinsurance in respect of its liability under the life assurance policy, or the part of that policy, that was reinsured; or

(d) any amount received or recovered by it that is a refund, or in the

nature of a refund, of the premium.

"(2) This section applies to assessments in respect of income of the year of income in which 1 July 1988 occurred and to assessments in respect of income of all later years of income.".