Income Tax (Transitional Provisions) Act 1997
(a) a life insurance company had a liability before 1 July 2000 under a life insurance policy where the income of the company attributable to the liability was exempt from tax before that date; and
(b) the liability or a part of the liability is to be discharged out of the company ' s segregated exempt assets; and
(c) there is a transfer of the company ' s assets to the segregated exempt assets to meet that liability or that part of the liability;
then, to the extent to which the assets are transferred to meet that liability or that part of the liability:
(d) if the transfer occurs before 1 October 2000 - the transfer is to be disregarded for the purposes of the Income Tax Assessment Act 1997 ; or
(e) if the transfer occurs on or after 1 October 2000 - the transfer is to be disregarded for the purposes of that Act, except:
(i) section 320-255 of that Act; and
(ii) any other provisions that rely on the operation of that section (for example, paragraph 320-15(1) (g) of that Act).
This means, amongst other things, that a life insurance company to which this subsection applies will not be able to claim a deduction in respect of the transfer under subsection 320-105(1) of that Act.
If subsection (1) has applied to a life insurance company in respect of a transfer of assets to meet a liability or a part of a liability, that subsection does not apply again in respect of another transfer of assets to meet that liability or that part of the liability.
If a life insurance company that is a friendly society segregates any of its assets in accordance with section 320-225 of the Income Tax Assessment Act 1997 in the 2000-01 income year, the calculation of the transfer values of the company ' s segregated exempt assets as at the end of that income year is to be made not later than 90 days after the end of that income year.