This information applies to you if you had a private health insurance policy with MBF on 8 November 2007 and will receive a cash payment under the demutualisation of MBF which took place on 16 June 2008.
If you were not a resident of Australia when the demutualisation of MBF took place this information does not apply to you. You should seek independent advice or contact the Tax Office.
In May 2008, MBF and BUPA Australia Group implemented a scheme to merge their businesses. As part of that scheme, MBF undertook a demutualisation which entitled its policy holders to a cash payment for the disposal of certain membership rights.
MBF will post to Participating Contributors the payment for the disposal of their membership rights in MBF on 30 June 2008.
On 26 June 2008, the Government introduced a Bill into Parliament to change the law relating to the capital gains tax (CGT) treatment of policy holders of health insurers who receive cash or shares when their health insurer demutualises.
The proposed changes are contained in Tax Laws Amendment (2008 Measures No. 4) Bill 2008. This Bill will become law when passed by both Houses of Parliament and approved by the Governor General.
Under the proposed law, policy holders will disregard any capital gains and losses that arise when a private health insurer demutualises.
The changes to the law are proposed to take effect from 1 July 2007, and if enacted, will apply to the demutualisation of MBF.
The Tax Office will continue to provide regular updates on the progress of the changes through Parliament, and how they will apply to you.
Until the proposed new law is enacted, there is some uncertainty about what amount, if any, should be included in your tax return as a result of the demutualisation. In light of this uncertainty, the Tax Office will allow you to lodge your 2007/2008 tax return without including any capital gain from the receipt of cash from the MBF demutualisation at this stage.
The Tax Office and MBF will let you know what amount (if any) to include in your tax return and how to do this at a later time.
Yes. The proposed changes are intended to take effect from 1 July 2007, and if enacted, will apply to the demutualisation of MBF.
When the proposed changes become law there will be no tax consequences for Participating Contributors who receive a cash payment under MBF’s demutualisation. Therefore, the proposed changes will allow you to disregard the amount received when completing your 2007-2008 tax return.
Any other capital gains that you may have from other transactions do need to be calculated in the normal way.
For more information, please see:
Last Modified: Friday, 27 June 2008
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