Show at F the deduction for insurance premiums paid by a complying superannuation fund to provide superannuation benefits upon the death or temporary or permanent disability of the member.
Note: Amendments to the tax law have been enacted to provide transitional relief to complying superannuation funds for income tax deductibility of total and permanent disability (TPD) insurance premiums. See what's new to determine whether these amendments apply to you.
A fund may use a variety of life insurance policies to provide these benefits. The fund can deduct the following:
- 30% of the premium for a whole-of-life policy if all the individuals whose lives are insured are members of the fund
- 10% of the premium for an endowment policy if all the individuals whose lives are insured are members of the fund
- for a policy that is not a whole-of-life or endowment policy
- 30% of the part of a premium that is specified in the insurance policy as being for a distinct part of the policy that would have been a whole-of-life policy if it had been a separate policy
- 10% of the part of a premium that is specified in the insurance policy as being for a distinct part of the policy that would have been an endowment policy if it had been a separate policy
- the part of a premium that is specified in an insurance policy as being wholly for the liability to provide certain death or disability benefits, as described in section 295-460 of the ITAA 1997, for fund members.
An actuarial certificate is not required in the above circumstances.
For more information on what a 'whole-of-life policy' is for these purposes see ATOID 2009/100 - Complying superannuation fund: deductibility of premiums on 'whole-of-life policy' - subsection 295-465(1) of the ITAA 1997.
For all other insurance policies, a complying fund can deduct the premium (or part thereof) that is attributable to the liability to provide death or disability superannuation benefits, as described in section 295-460 of the ITAA 1997, for fund members. An actuarial certificate is required in order to obtain this deduction.
A complying fund may also deduct premiums on insurance policies to replace income during periods of temporary disability.
For more information, see Taxation Determination TD 2007/3 Income tax: is a deduction allowable to complying superannuation funds under section 279 of the Income Tax Assessment Act 1936, for insurance premiums attributable to the provision of benefits for members in the event of temporary disability longer than two years?End of further information
In the case of funds that self-insure, the deduction is equal to a reasonable arm's length premium, rather than the lowest arm's length premium, for the cost of death and disability cover provided. An actuarial certificate is also required.
Rather than claiming a deduction for insurance premiums paid, a complying fund may choose to deduct (under section 295-470 of the ITAA 1997) an amount for its future liability to pay death or disability superannuation benefits. Deductions for this amount should be included at F.