Tax Laws Amendment (2004 Measures No. 2) Act 2004 (83 of 2004)

Schedule 1   Life insurance companies

Part 1   Amendments commencing on 30 June 2000

Income Tax Assessment Act 1997

5   Section 320-1

Omit all the words from and including "The taxable income of life insurance companies" to and including "the company tax rate.", substitute:

Life insurance companies can have one or both of these taxable incomes for any income year for the purposes of working out their income tax for that year:

• a taxable income of the complying superannuation class, which consists of taxable income that relates to complying superannuation business and is taxed at the rate of tax that applies to complying superannuation funds;

• a taxable income of the ordinary class, which consists of taxable income that relates to other businesses and is taxed at the corporate tax rate.

Life insurance companies can also have tax losses that correspond to those 2 classes. The Division provides that tax losses of a particular class can be deducted only from incomes in respect of that class.

The Division ensures that the income tax worked out on the basis of these taxable incomes and tax losses is a single amount of income tax on one taxable income.