Tax Laws Amendment (2010 Measures No. 1) Act 2010 (56 of 2010)

Schedule 5   Consolidation

Part 10   General insurance companies

Income Tax Assessment Act 1997

118   At the end of Subdivision 713-M

Add:

713-725 Treatment of certain assets and liabilities of general insurance companies

(1) This section applies if a *general insurance company becomes or ceases to be a *subsidiary member of a *consolidated group.

(2) If the *general insurance company becomes a *subsidiary member of the group:

(a) in working out the step 2 amount for the purposes of the table in section 705-60, reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and

(b) in working out the *tax cost setting amount of a thing mentioned in subsection (4) for the purposes of section 705-35, treat the *market value of the thing as zero.

(3) If the *general insurance company ceases to be a *subsidiary member of the group:

(a) in working out the step 4 amount for the purposes of the table in section 711-20, reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and

(b) for the purposes of section 711-25, treat the *terminating value of a thing mentioned in subsection (4) as zero.

(4) The things are the *general insurance company's:

(a) deferred acquisition costs in relation to the company's unearned premium reserve; and

(b) deferred reinsurance expenses in relation to the company's unearned premium reserve; and

(c) recoveries receivable in relation to the company's *outstanding claims.