This measure amends the income tax laws to provide relief from capital gains tax (CGT) to private health insurance policy holders when their insurer demutualises to a for profit insurer. The amendments facilitate the demutualisation of private health insurers.
The amendments ensure that policy holders who receive shares, in the demutualised insurer, will not be subject to CGT when they receive the shares. In addition, these shares will broadly receive a market value cost base.
Policy holders who receive a cash payment under their insurer’s demutualisation, rather than shares, will not be subject to CGT at the time they receive this payment.
The changes provide certainty to policy holders of health insurers that have demutualised.
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