• 22 - Bonuses from life insurance companies and friendly societies 2012

    Question 22 image from the Tax return for individuals (supplementary section) form.

    Did you receive a bonus because your life insurance policy or friendly society insurance bond matured, was partly or fully surrendered, terminated or forfeited?

    Attention

    Warning:

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

    End of attention

    Life insurance policies are issued by life insurance companies and friendly societies.

    NO

    YES

    Read below.

    Danger

    Do not declare as income:

    • any life insurance bonuses from policies that
      • you started before 28 August 1982
      • matured due to the death of the person insured
      • you surrendered due to an accident, illness or other disability of the person insured
      • you surrendered due to severe financial hardship
      • are retirement savings accounts
    • any benefits you received from a friendly society that are bonuses from income bonds; include these amounts at item 24 - Other income.

    If you have received a statement detailing the bonus amount allocated to your continuing life insurance policy or friendly society bond but you have not actually received the bonus or directed how it is to be dealt with, do not include the bonus amount as income.

    End of danger

    You need to know

    You need to include a bonus amount at this item if all the following conditions apply:

    • you received the bonus amount or directed how it is to be dealt with, within 10 years from when the policy started
    • your life insurance policy or friendly society insurance bond matured, was partly or fully surrendered, terminated or forfeited, and
    • the bonus amount was in addition to the capital amount that you paid to the life insurance company or friendly society.
    Attention

    If, during the term of your policy or bond, you increased the amount of your premiums by more than 25% of the amount of premiums you paid in the previous policy year, your policy is taken to start at the beginning of the policy year in which you paid the increased premiums. This means that you may need to include some or all of a bonus amount in your assessable income.

    End of attention

    You cannot claim a loss if your life insurance policy or friendly society insurance bond matured or was partly or fully surrendered, terminated or forfeited.

    Attention

    Different rules apply to a bonus received from a policy that started on or after 28 August 1982 and before 8 December 1983. Generally such a bonus does not need to be included in assessable income unless the policy has been taken to start at a later date and the rules apply. If you are not sure whether you need to include your bonus, phone 13 28 61.

    End of attention

    What you may need

    • Your life insurance policy
    • Your friendly society policy
    • Your life insurance bonus advice
    • Your friendly society bonus advice

    Completing this item

    Write at W item 22 on page 15 of your tax return:

    • the whole bonus amount you received in 2011-12 if you received it during the first eight years of the policy
    • two-thirds of the bonus amount you received in 2011-12 if you received it during the ninth year of the policy, or
    • one-third of the bonus amount you received in 2011-12 if you received it during the 10th year of the policy.

    Do not show cents.

    Do not include any bonus amount received after the 10th year of the policy.

    Check that you have ...

    • written on your tax return the correct bonus amount
    • kept a copy of your policy document and bonus advice with your other records; do not attach them to your tax return.

    Tax offset

    You will get a tax offset equal to 30% of any bonus amounts included in your income. We will work out this tax offset for you.

    Where to go next

      Last modified: 01 Jun 2012QC 25736