Draft Taxation Determination
TD 94/D50
Income tax: is the premium payable on a trauma insurance policy, sold with a life assurance policy rider, assessable income of a life company?
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Please note that the PDF version is the authorised version of this draft ruling.This document has been finalised by TD 95/40.
FOI status:
draft only - for commentPreamble
| Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO. |
1. Yes. The premium payable on the trauma insurance policy sold by a life assurance company constitutes assessable income of the life company. As a trauma insurance policy is an accident and disability policy the decision in National Mutual Life Association of Australia v. FC of T (1959) 102 CLR 29 applies to treat the premiums as assessable income of the company.
2. The premium payable by the insured for the trauma insurance cover can, in all circumstances, be separately calculated from the premium payable for the life assurance cover.
3. If it were the case that the premium for the trauma insurance and the premium for the life assurance could not be separately calculated, then the whole of the premium is assessable income of the life company: refer National Mutual case supra.
Commissioner of Taxation
15 May 1994
References
ATO references:
NO
BO Insurance Industry Cell
Related Rulings/Determinations:
TD 94/D49
TD 94/D51
TD 94/D52
TD 94/D53
Subject References:
life assurance company
trauma insurance policy
accident & disability insurance policy
Legislative References:
ITAA 25(1)
Case References:
National Mutual Life Association of Australia v. FC of T
(1959) 102 CLR 29
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