Taxation Laws Amendment Act 1994 (56 of 1994)

Part 3   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 10   Life assurance companies and registered organizations

79   Insertion of new section

After section 113 of the Principal Act the following section is inserted:

Expenses of general management incurred in obtaining certain premiums

"113A. (1) If:

(a) expenditure is incurred by a life assurance company in the year of income in the general management of the company's business; and

(b) the expenditure is not an allowable deduction under section 113 because of paragraph 113(3)(b);

the expenditure is an allowable deduction to the extent to which it was incurred in gaining or producing:

(c) superannuation premiums to which section 111AC applies; or

(d) the investment component of relevant life insurance premiums to which section 111AD applies.

"(2) If, assuming that:

(a) the Taxation Laws Amendment Act 1994 had not been enacted; and

(b) this Act provided that a life assurance company's assessable income included the superannuation premiums and the investment component of relevant life assurance premiums received by the company;

a deduction would not have been allowed to a life assurance company in respect of a loss, outgoing or expenditure or a part of a loss, outgoing or expenditure, then, a deduction is not allowable to the company in respect of the loss, outgoing or expenditure or the part of the loss, outgoing or expenditure, as the case may be, under this section.

"(3) For the purposes of this section, expenditure of a capital nature is taken not to be expenditure incurred in the general management of the business of the company.

"(4) A reference in this section to a deduction in respect of a loss, outgoing or expenditure includes a reference to a deduction based on, or calculated by reference to, all or a portion of the loss, outgoing or expenditure.

"(5) In this section:

'relevant life assurance premiums' means premiums received in respect of life assurance policies other than:

(a) superannuation premiums; or

(b) premiums received in respect of exempt policies; or

(c) specified roll-over amounts; or

(d) premiums received in respect of eligible non-resident policies; or

(e) premiums exempt from tax under section 23AH; or

(f) premiums exempt from tax under paragraph 23(r).

"(6) This section applies to expenses incurred, or to deductions in respect of a loss, outgoing or expenditure incurred, on or after 1 January 1994.".


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