Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 (52 of 2024)

Schedule 6   Income tax amendments for updates to accounting standards for general insurance contracts

Part 3   Application and transitional provisions

26   Transitional - first income year for which amendments apply

Scope

(1) This item applies to a general insurance company unless the company elects for item 27 to apply in the manner set out in that item.

Provision for, and payment of, claims by general insurance companies

(2) In applying Subdivision 321-A of the Income Tax Assessment Act 1997 (as amended by this Schedule) to a general insurance company's assessment for the start year:

(a) treat paragraphs 321-10(a) and 321-15(b) of that Act as referring to the value, at the end of the previous income year, of the company's liability for outstanding claims under general insurance policies; and

(b) that value is to be worked out:

(i) under section 321-20 of that Act as in force immediately before the commencement of this Schedule; and

(ii) not under that section as amended by this Schedule.

(3) Subitem (2) does not affect paragraph 321-10(b) of that Act.

Note: That paragraph refers to the value, at the end of that first income year, of the company's adjusted liability for incurred claims under general insurance policies.

Premium income of general insurance companies

(4) In applying Subdivision 321-B of the Income Tax Assessment Act 1997 (as amended by this Schedule) to a general insurance company's assessment for the start year:

(a) treat paragraphs 321-50(a) and 321-55(b) of that Act as referring to the value, at the end of the previous income year, of the company's unearned premium reserve; and

(b) that value is to be worked out:

(i) under section 321-60 of that Act as in force immediately before the commencement of this Schedule; and

(ii) not under that section as amended by this Schedule.

(5) Subitem (4) does not affect paragraph 321-50(b) of that Act.

Note: That paragraph refers to the value, at the end of that first income year, of the company's adjusted liability for remaining coverage under general insurance policies.