Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-35 - INSURANCE BUSINESS  

Division 320 - Life insurance companies  

Subdivision 320-B - What is included in a life insurance company ' s assessable income  

Operative provisions

SECTION 320-37   Non-assessable non-exempt income  

320-37(1)    

These amounts *derived by a *life insurance company are not assessable income and are not *exempt income:

(a) amounts of ordinary income and statutory income derived from *segregated exempt assets, being income that relates to the period during which the assets were segregated exempt assets;

(b) amounts of ordinary income and statutory income derived from the *disposal of units in a *pooled superannuation trust;

(c) if an *Australian/overseas fund or an *overseas fund established by the company derived foreign establishment amounts - the foreign resident proportion of the foreign establishment amounts;

(d) if the company is a *friendly society:

(i) amounts derived before 1 July 2001 that are exempt from income tax under section 50-1 ; and

(ii) amounts derived on or after 1 July 2001 but before 1 January 2003, that are attributable to *income bonds, *funeral policies or *sickness policies; and

(iii) amounts derived on or after 1 July 2001 but before 1 January 2003, that are attributable to *scholarship plans and would have been exempt from income tax under section 50-1 if they had been received before 1 July 2001; and

(iv) amounts derived on or after 1 January 2003 that are attributable to income bonds, funeral policies or *sickness policies, that were issued before 1 January 2003; and

(v) amounts derived on or after 1 January 2003 that are attributable to scholarship plans issued before 1 January 2003 and that would have been exempt from income tax if they had been received before 1 July 2001.

Note:

The effect of this section is modified when the life insurance business of a life insurance company is transferred to another life insurance company: see section 320-325 .

320-37(1A)    

For the purposes of paragraph (1)(c), foreign establishment amounts for the *life insurance company means the total amount of assessable income that was *derived in the income year:

(a) in the course of the carrying on by the company of a business in a foreign country at or through a *permanent establishment of the company in that country; and

(b) from sources in that or any other foreign country; and

(c) from assets that:

(i) are attributable to the permanent establishment; and

(ii) are held to meet the liabilities under the *life insurance policies issued by the company at or through the permanent establishment.

320-37(2)    

For the purposes of paragraph (1)(c), the foreign resident proportion of the *foreign establishment amounts is the amount worked out using the formula:

Foreign establishment amounts

×

Foreign resident foreign establishment policy liabilities All foreign establishment policy liabilities

where:

all foreign establishment policy liabilities
means the average value for the income year (as calculated by an *actuary) of the policy liabilities (as defined in the *Valuation Standard) for all *life insurance policies that:

(a) were included in the class of *life insurance business to which the company ' s *Australian/overseas fund or *overseas fund relates; and

(b) were issued by the company at or through the *permanent establishment to which the foreign establishment amounts relate.

foreign resident foreign establishment policy liabilities
means the average value for the income year (as calculated by an *actuary) of the policy liabilities (as defined in the *Valuation Standard) for all *life insurance policies that:

(a) are *foreign resident life insurance policies; and

(b) were issued by the company at or through the *permanent establishment to which the foreign establishment amounts relate.