Tax Laws Amendment (2011 Measures No. 4) Act 2011 (43 of 2011)

Schedule 3   Disability superannuation benefits

Part 1   Deductible percentage of insurance premiums

Division 2   Deductions for self-insurance

Income Tax Assessment Act 1997

6   After subsection 295-465(2)

Insert:

(2A) For the purposes of subsection (2), the regulations may provide that a specified proportion of an amount mentioned in subsection (2B) may be treated as being the amount the fund could reasonably be expected to pay in an *arm’s length transaction to obtain an insurance policy to cover it for its current or contingent liabilities to provide benefits referred to in section 295-460.

Example: If:

(a) an actuary certifies the amount a fund could reasonably be expected to pay in an arm’s length transaction to obtain an insurance policy; and

(b) the insurance policy covers liabilities of the fund to provide a class of total and permanent disability benefits broader than that covered by section 295-460; and

(c) the insurance policy is specified in the regulations; and

(d) the fund does not have insurance coverage for the liabilities;

the fund may deduct, under subsection (2), so much of that certified amount as is specified in the regulations.

(2B) The amount is the amount a *complying superannuation fund could reasonably be expected to pay in an *arm’s length transaction to obtain an insurance policy specified in the regulations.