Income Tax Assessment Act 1997

Part 3-90 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec 700-1 of the Income Tax (Transitional Provisions) Act 1997 ).

Div 713 inserted by No 117 of 2002, s 3 and Sch 5 item 6, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec 700-1 of the Income Tax (Transitional Provisions) Act 1997 ).

Subdiv 713-L inserted by No 16 of 2003, s 3 and Sch 6 item 1, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec 700-1 of the Income Tax (Transitional Provisions) Act 1997 ).

S 713-553 repealed by No 56 of 2010, s 3 and Sch 5 item 196, applicable on and after 1 July 2002. S 713-553 formerly read:

SECTION 713-553 Special rules relating to segregated exempt assets  
Conditions for sections 713-555 and 713-560 to apply

713-553(1)
Sections 713-555 and 713-560 apply only if both the conditions in subsections (2) and (3) are met.

Note:

Each of those sections sets out extra conditions that must also be met for the section to apply.

713-553(2)
The first condition is that there is a time (the fusion time ) when it starts to be the case that both these entities (the fused entities ) are ^* members of a single ^* consolidated group:

(a) a ^* life insurance company;

(b) an entity (the policyholder ) holding an ^* exempt life insurance policy (the fused entities ' policy ) that:

(i) was issued when the policyholder and the life insurance company were not both members of a single consolidated group; and

(ii) provided for the life insurance company to pay an ^* immediate annuity to the policyholder.

713-553(3)
The second condition is that the ^* head company of the ^* consolidated group determines the following amounts:

(a) the total ^* transfer value of the head company ' s ^* segregated exempt assets;

(b) the amount of the head company ' s ^* exempt life insurance policy liabilities;

as at a time (the determination time ) that is the fusion time or, if the head company does not determine those amounts as at the fusion time, the first time after the fusion time as at which the head company determines those amounts.

Note:

If the life insurance company becomes a subsidiary member of the consolidated group, that company ' s segregated exempt assets become segregated exempt assets of the head company of the group because of section 701-5 (Entry history rule) and section 713-505 (Head company treated as a life insurance company).

Object of sections 713-555 and 713-560

713-553(4)
The object of sections 713-555 and 713-560 is to ensure that the ^* head company of the ^* consolidated group:

(a) does not have excessive amounts included in its assessable income because section 701-1 (Single entity rule) treats the fused entities as one so liabilities under the fused entities ' policy do not contribute to the amount of the head company ' s ^* exempt life insurance policy liabilities as at the determination time; and

(b) has amounts included in its assessable income, or is allowed deductions, to reflect what would have happened to the fused entities if they had not both been ^* members of the group at any time between the fusion time and the determination time when they were both members of the group.

S 713-525 to s 713-585 substituted for s 713-525 and s 713-530 by No 41 of 2005.