Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-90 - CONSOLIDATED GROUPS

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Division 713 - Rules for particular kinds of entities

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Subdivision 713-M - General insurance companies

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Liabilities and reserves of general insurance companies joining and leaving consolidated groups

SECTION 713-710

713-710 Treatment of liabilities and reserves for income year when general insurance company joins or leaves group

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Sections 713-715 and 713-720 affect how sections 321-10 , 321-15 , 321-50 and 321-55 (the affected sections ) apply in relation to these values (the affected values ):

(a)

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the value of a *general insurance company ' s adjusted *liability for incurred claims company under ^* general insurance policies that is worked out under section 321-20 ;

(b)

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the value of a general insurance company ' s adjusted *liability for remaining coverage under general insurance policies that is worked out under section 321-60 .

Note 1:

Sections 321-10 and 321-15 both operate on the basis of a comparison of the value of a general insurance company ' s adjusted liability for incurred claims at the end of the current year with the value of that liability at the end of the previous income year, so that:

(a) section 321-10 includes an amount in the company ' s assessable income for the current year if the value at the end of the current year is less than the value at the end of the previous income year; and

(b) section 321-15 allows a deduction for the current year if the value at the end of the current year is more than the value at the end of the previous income year.

Note 2:

Sections 321-50 and 321-55 both operate on the basis of a comparison of the value of a general insurance company ' s adjusted liability for remaining coverage at the end of the current year with the value of that reserve at the end of the previous income year, so that:

(a) section 321-50 includes an amount in the company ' s assessable income for the current year if the value at the end of the current year is less than the value at the end of the previous income year; and

(b) section 321-55 allows a deduction for the current year if the value at the end of the current year is more than the value at the end of the previous income year.

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