Taxation Determination

TD 95/43W

Income tax: capital gains: is a sum obtained by a taxpayer under a trauma insurance policy an exempt capital gain under subsection 160ZB(1) of the Income Tax Assessment Act 1936?

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Notice of Withdrawal

Taxation Determination TD 95/43 is withdrawn with effect from today.

1. Taxation Determination TD 95/43 explains that certain payments received in respect of an illness suffered by an individual or their spouse are treated as exempt capital gains under subsection 160ZB(1) of the Income Tax Assessment Act 1936 (ITAA 1936). Subsection 160ZB(1) was ultimately rewritten as paragraphs 118-37(1)(a) and 118-37(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997).

2. When the law was rewritten, amendments were made so that the exemption in paragraph 118-37(1)(b)) of the ITAA 1997 is broader than the administrative practice and clearly applies to:

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payments in respect of illness; and

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payments in respect of injury or illness suffered by a relative of the recipient personally.

3. As the law in respect of these matters is now clear, the Determination is no longer required and is withdrawn.

Commissioner of Taxation
10 March 2010

Previously issued as Draft TD 94/D53

References

ATO references:
NO 2006/20258