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Insurance settlements

There are circumstances where you do not have to pay GST on an insurance settlement.

Last updated 15 June 2015

You do not have to pay GST on an insurance settlement, provided you tell the insurer before making the claim what proportion of the premium you can claim GST credits for. (You can claim GST credits on the part of the premium that relates to business purposes.)

If you do not tell your insurer before making the claim, you may have to pay GST when your claim is settled and you lodge an activity statement.

The insurer will expect to cover you only for the actual loss – that is, the loss minus the amount of GST credits you can claim on the repair or replacement cost of the item insured.

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