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  • Chapter 5: Foreign life assurance policies

    This chapter explains the application of the FIF measures to taxpayers who have an interest in a FLP. It explains:

    • what a FLP is
    • when a taxpayer is considered to have an interest in a FLP
    • the period where the interest in the FLP is taxable
    • what a FLP's notional accounting period is, and
    • the two methods of taxation that are used to determine FIF income in relation to an interest in a FLP.

    Meaning of a FLP



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Your FLP for an income year is a life assurance policy issued by an entity that was not a resident at any time in that income year.

    A life assurance policy is one that provides for the payment of money:

    • upon death, other than death by accident or specified sickness only, or
    • on the happening of a specified event which relates to the ending or continuing of a human life.

    A life assurance policy also includes an instrument securing the grant of an annuity for a term dependent upon a human life. [subsection 482(2)]

    The FIF measures do not apply to the following four categories of life policies:

    • an Australian policy, provided that the entity which issued the policy was authorised under the Life Insurance Act 1995 to carry on life insurance business in Australia when it issued the policy
    • policies that provide for payment of money only on death, or on death or permanent disability, and for which the premiums or premium instalments are calculated solely by reference to the period for which the life concerned is expected to continue, or within which the life concerned is expected to terminate
    • policies issued before 1 July 1992 that cannot, on or after that date, be cancelled, surrendered or redeemed and for which the terms have not, on or after that date, been materially altered, or
    • a contract of reinsurance between a resident insurer and a non-resident reinsurer for life assurance policies that provide only life cover. [paragraphs 482(2)(e) and (f)]

    You have an interest in a FLP if you have legal title to the FLP. [subsection 483(3)]

    Last modified: 29 Jun 2010QC 22887