This information applies to you if you had a private health insurance policy with MBF on 8 November 2007 and have received a cash payment under the demutualisation of MBF which took place on 16 June 2008.
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 sent the payment to policy holders for the disposal of their membership rights in MBF on 30 June 2008.
After the demutualisation took place, a change was made to 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 changes are contained in Tax Laws Amendment (2008 Measures No. 4) Act 2008.
Under the new law, policy holders disregard any capital gains and losses that arise when a private health insurer demutualises.
The changes to the law take effect from 1 July 2007, and apply to the demutualisation of MBF.
Your cash payment from MBF is not subject to income tax and you do not have to declare any amount in your 2007–08 tax return in respect of the payment.
Yes. The new law takes effect from 1 July 2007 and applies to the demutualisation of MBF.
There are no tax consequences for policy holders who have received a cash payment under MBF’s demutualisation. You can disregard the amount received when completing your 2007–08 tax return.
You will need to request an amendment to your 2007–08 tax return to exclude the capital gain amount. For information on how to request an amendment to your tax return, refer to Amending your tax return.
Any other capital gains that you may have from other transactions need to be calculated in the normal way.
If you were a foreign resident at the time of the demutualisation, you must disregard any capital gain or loss that arises from receiving cash under the demutualisation. You should seek specialist advice on whether the demutualisation has any tax implications for you in your country of residence.
For more information, see:
Last Modified: Tuesday, 6 October 2009
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